Empirical Study On The Impact Of The Convertible Bonds On The Agency Cost

The development of convertible bonds has a rather long history in home and abroad, the theoretical and empirical research of the convertible bonds in financing of is quite advanced. The financing motive, financing superiority and financing costs have catch many scholar's attention. From the view of modern economics and financial theory, we shouldn't not only pay attention to it's financing function,but also pay more attention to it's effection in enterprise capital structure and governance mechanism. However, most of domestic company that issued convertible bonds regards the bonds as one financing of low cost or equity financing of being postphoned. They didn't have a profoundly understanding of bond's governance mechanism. In fact, the convertible bonds is not only a important refinancing method, and It can decrease agency cost and improve corporate governance.The article use the reaserch method of norm analysis and demonstration analysis to analyzes the convertible bonds'effects in decreasing agency cost and improving corporate governance.There are six chapters in the paper. The first chapter introduces the topic background, research goal and significance, research methods, article mentality and primary coverage as well as research innovations and limitations. the second chapter introduces literature review. the third chapter analyse the convertible bonds'effects in decreasing agency cost and improving corporate governance. The fourth chapter use empirical methods verify the analysis.The fifth chapter has chosen case to prove that further.In the last chapter, The article makes a theoretical summary and suggests to make full use of it's function in reducing the agency cost.This research of the article indicate: (l)compare with other refinance methods, convertible bond has the distinctive effect in reducing agency cost. Not only it can play the financing role, but also it can decrease agency cost and improve corporate governance (2) we should make full use of it's in reducing the agency cost ,for example draw convertible bonds into equities incentive system .