Non-tradable Shares, Capital Structure And Corporate Value

Since the beginning of the 20th century, with the gradual deepening of economic reform of china, capital market reform has entered a critical stage. The fundamental contradiction of the system that has plagued our capital market for years has been fully exposed for all. This is that most of the listed stocks are artificially split into two parts in Chinese stock markets. An overwhelming majority of the community is the people as the main holders of the tradable shares and the other is the Government and other agencies who hold some non-tradable shares, forming the phenomenon that some of the same stocks can be listed circulation, but some cannot listed circulation. And because of the existence of absolute control, it leads to a "due to the dominance of, "a domineering" control. It has brought great contradictions to corporate governance that the same stock has not the same stake, and not only greatly hindered the corporate governance structure building, but also disordered the market mechanism, and is an important cause that major shareholder of the non-tradable shares unreasonable seizes interests of tradable shareholders against legitimately system. Non-tradable shares prevented the normal corporate governance structure formation, brought about huge operating costs and reduced the company's value.The so-called capital structure is the different securities sum that the company itself issued. Non-tradable shares of not listing the circulation and tradable shares of listing circulation, in essence, were issued two different securities. So discussing capital structure issues under the conditions of non-tradable shares, we can not avoid the question: the existence of non-tradable shares brought to our listed companies a unique requirement security.In classic theories of determining the value of the company, the capital structure is one of the determining factors. Under the unique capital structure, we analysis non-tradable shares, capital structure and enterprise value, and using the data of listed companies in recent years, I processed this special securities, analysis the inter-impact of the non-tradable shares, the capital structure, and the value of the company. Finally I reached on the issue that non-tradable shares company impact the company value and the corresponding countermeasures for next non-tradable shares reform.