The Analysis On Equity Financing Preference Of Chinese Listed Companies

By going carefully through the overseas financing theory, this article found that although the starting point of modern finance theory and the specific target of the inspection are different, they are in favor that financing should follow the principle of "first endogenous, after foreign source; first claims after the shares "--an optimal financing priorities. However, the observation of China's listed enterprises to find financing options -- precisely with the contrary, showing of "foreign source after source within; first shares after claims "equity financing with a clear preference. Of course, if only it is inconsistent with the theory and practice abroad, it should be not a problem. The problem is that at present, listed companies'financing preference has posted a big threat on listed companies in China and healthy development of the securities market. Therefore, to find clear why a listed company does this kind of financing options, thereby optimizing the financing of listed companies, is particularly necessary. This paper attributes the main reasons of the enterprises'preference on equity financing into five areas: First, equity financing and debt financing costs below cost. Second, the equity structure is irrational. Third, the internal control is serious. Fourth, Stock market system flaws. Fifth the bond market has been slow to develop. Next, combining the equity division reform, after inspecting the above five factors of the stocks , Financing also acts under the new situation of listed companies continued concern. Finally it proposes corresponding governance from reality: First, to reform the stock market to improve the current system. Second, to strengthen the bond market, and broaden the debt financing channels. Third, to improve the corporate governance structure to prevent internal control. Fourth, to strengthen the monitoring of listed companies issue oriented.