| In developed foreign capital market, SEO is the main method of refinancing for listed companies. About 80~90% of refinancing in American is carried out in the form of SEO. In China SEO is also an important method of refinancing for listed companies. And in the future SEO will play a more and more effective role in the stock market of China with the development and innovation of our nation's economy. Because of the inconsequence in the pricing of SEO and immoral purpose of listed companies for SEO, the securities always come into the stock market with a relative higher price than their true value. As a result, the news of SEO was once the reason for falling of stock price. Considering the points above, there should be an effective method of pricing for SEO which is significant for the protection of investors'wealth, improvement of SEO of listed companies and the stabilization of the stock market.First, this paper introduces several ways in which SEO is priced and analyze the characteristics and applicability of them. Second, this paper studies the value of SEO securities from the point of inherence value, liquidity value and currency privilege value. The inherence value is represented by the earning ability, expanding ability, repaying ability and operating condition. The scale of current stock will affect the liquidity value as well as the proportion between current stock and the total ones which including uncurrent stock will affect the currency privilege value. Third, we present several suppositions about SEO which are later validated empirically. In order to describe the differences between the value of stock before and after SEO, we induct the method of catastrophe series approach. Finally, this paper illustrates the application of the SEO pricing model formulated before based on practical data. |
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