An Analysis On Consideration Ratio Solutions To The Reform Of Splitting Share Structure In China

The reform of splitting share structure is a historic event of China's capital market, of which consideration ratio is the key issue. This paper does some empirical studies in the following three aspects: the consideration ratio solution, the level of it and its influencial factors.First, this paper, from an angle of the size of share, divided the solution of consideration ratio of listed companies into four groups, i.e., those adjusting the structure of stock, those expanding the size of stock, those contracting the size of the stock and their commitments. Furthermore, the listed companies are divided into nine groups, and comparatively analyzed the pros and foes of different solutions and their sphere of application.Second, because the liquidation right is a complicated option right, this paper calculates the theoretical consideration ratio by using the pricing formulae of Black-Scholes option right. Then, it compares the theoretical and real consideration ratio. Last, the paper analyzes the effecting factors by multi-factor regression.By the empirical studies, this paper reaches the following conclusions: a) the majority of reformed listed companies pay a low real consideration ratio, and the benefits of their liquidated stockholders are not fully protected; b) real consideration ratio has a non-remarkably positive relation to non-liquated stock ratio and P/E ratio of companies on the first day of listing, has a negative relation to the ratio of No. 1 stockholder and has a remarkably positive the PB ratio of the year before the reform and; c) the most important factor affecting the level of consideration ratio is the net stockholder profit ratio of the year before the reform, which has a remarkably negative relation to real consideration ratio.