The Study On Incentives For The Preference For Stock Financing Of Chinese Listed Companies

When a company needs to develop, it will come cross the financing problem.the core of the problem is how to acquire capital that corporations need and how to arrange the proportions of different capital resources, in order to coordinate the financing risk and financing cost. It is worthwile to do some research on the financing of Chinese companies. There are many researches ever since 1958, when Modigliani and Miller put forward MM Theory together. With the deeper the research carried on and the development of mutilsubject. Corporate financing theory has expanded widely in the areas of corporate theory, property right theory, and information economics. We could use its study methods, analysis trains of thought and some basic conclusions in analysing the capital structures of Chinese corporations, and in selecting the finacing ways or strategies for Chinese corporations.This paper uses regulative research methods to ananlyze Chinese listed corporations, borrowing ideas from the fruits of domestic and foreign scholars.This paper analyzes financing preference of Chinese listed corporations by the following steps. After the introduction of the basic finance theories, then go on with the Chinese companies'financing sdtructure character, the relationship between retained earning and the total capital, and the profit attitude to the stock-allocation policy. The results show that obvious preference for stock financing exists in Chinese corporations. Furthermore, this paper analyzes the reasons of the preference for stock financing. Based on the analysis above, this paper puts forward some proposals to cultivate the rationalinvestors, etc.