An Analysis Of Debt Financing Of Corporations

As a means of financing, unlike the equity, debt must be paid off when the contract expires; and interest must be paid off in promised time. Because of the peculiarities of debt, creditors can appeal to court which may lead to liquidation and restructuring of the indebted corporation. In order to make sure the relativity between the debt and corporation governance, this dissertation analyzes the mainland's corporations listing in mainland and in HongKong, which makes a conclusion that the relativity is stronger in the corporations listed in HongKong, and the relativity is not always stronger in the corporations listed in HongKongi in different industry. To explain the conclusion, this dissertation makes a comparative study of the institutional environment of capital market , inner governance mechanism of corporations, choice of financing and etc. between mainland and HongKong, which points out some limitations in mainland. Because of the limitations, debt can't restrict the indebted corporation effectively, which leads to the infraction of creditors' advantage.