The Study Of China Listed Company Value With Pyramid Equity Structure

With the study depth on Company Management, much research has shown that Equity Structure in many Listed Company had changed from Level Structure into Pyramid Structure. In the meaning time, the ultimate owner at the upper Pyramid structure could get big Vote Right which is higher than their Ownership. In this instance, they will strive to acquire Private Benefits of Control as much as possible. This behavior will drive the end stockholders to chase the biggest benefit of themselves, while ignore the value of company as well as the benefits of minority shareholders.After done some research in literatures related to foreign and domestic, this paper began with pyramid equity structure and tried to find the ultimate owner of such structure listed companies, and how they can maximize their benefits under such structure. For the use of control rights, this paper followed two lines to analysis:on one hand, the ultimate owner of one company can select capital structure which is favorable to them but maybe not the best choice for one company, as we know, capital structure can highly impact the operation of one company; on the other hand, form the upper point of one Pyramid, there are many channels lead to the bottom, and many channels are concealed to outsiders, then ultimate owners can transit "Benefits" from the Listed company in the bottom into their own hands, these behavior undoubtedly nuisance the value of these listed companies, then the benefits of outsiders who have bought shares of such companies will be highly been impaired.This thesis tried to study the relationship of pyramid equity structure and the value of listed companies, in the research process, this paper sort on case studies and empirical analysis to prove that equity structure can highly impact company value. Based on the conclusion, this paper attempt to sort some strategic to cope with these conduct of ultimate owners, and to protest benefits of minority shareholders and increase the value of listed companies. Only under these circumstances, our equity capital market can develop healthier and faster.