Empirical Analysis On Equity Financing Preference Of Listed Company In The Industry Of Communication Equipment

With the deep implementation of economic reform, there is a transformation from appropriate funds to self-financing in company's'financing activity in China. Firms'financing was provided with a new market place after the foundation of Shanghai and Shenzhen stock exchange in 1990 and 1991. From then on, the market scale of stock exchange expanded year and year, and the stock market played more and more important role in the whole national economy. The equity financing preference of listed company was regarded as one of the focuses by many researchers. According to the reality of Chinese stock market, with the financing theory and capital structure theory, to reveal the true reason of listed company's'equity financing preference and give some reasonable advice on listed company's'financing activity is meaningful to meliorate the corporate supervision system, improve the efficiency of resources distribution, promote the stock market to develop continuously, healthily and steadily. Since 1950s of last century, foreign researchers have begun to study the relation between capital structure and enterprise value. In 1958, Modigliani.F and M.Miller published a paper, "The Cost of Capital, Corporation Finance and the Theory of Investment", called MM theory, which indicated the foundation of modern enterprise capital structure theory. The theory discovered that in the mature market, there is irrelevance between enterprise value and capital structure and the theory guided people to realize the limitation of traditional theory under the circumstances of full market. Since then, lots of researchers have developed many valuable theories, such as balance theory, signal incentive theory, the pecking order theory and so on. Since the middle of 1990s, the same study on the issue has also been preceded by some domestic researchers and have made some progress. An enterprise's financing behavior consists of two aspects: internal financing and external financing. The internal financing means the company makes use of retained earnings to pay daily operation and the external one includes debt financing and equity financing. Although there were many a theory...