Refinancing Of Listed Real Estate Companies Market Reaction To The Theory And Empirical Analysis

Fund is needed by each company, especially for the companies in real estate industry. Real estate companies are capital-intensive that tens of thousands of dollars are used for land space purchase and property development and financing problem is the hot issue for real estate companies. Since the financial crises in 2007, the approval of corporate credit and restriction threshold are more and more strict for the real estate companies, therefore, they turn their sights towards the capital market. The equity financing and refinancing through the capital market have become more and more important way for listed companies of real estate.Equity financing has been studied in depth by economists in western countries and the birth of MM theory attracted wide attention on corporate structure. Modigliani and Miller made the conclusions of MM theory in The Cost of Capital, Corporation Finance, and the Theory of Investment, which are the foundation of modern capital structure theory. The enterprise financing theories of western countries, which are based on a developed commodity economy and serve capitalist market economy, have a significant impact on financing activities of the listed companies of all times. The domestic researches on refinancing of the listed companies make the relative theoretical studies and empirical analyses, which consult the western enterprise financing theories and combine with specific condition in China. On the path of enterprise financing, assumptions have been improved and relaxed.A variety of researches are made in aspects of financing theories, refinancing theories and corporate performance. Due to lack of researches on the listed companies of real estate, this paper comparatively analyses the performance before and after refinancing through the changes of short-term stock price and long-term business performance. The changes of short-term stock price measure the abnormal reaction on the significant events or information announcement by the index of Abnormal Return. The changes of long-term business performance are measured by the indices of EVA and EVA Spread which takes the costs of debt capital and equity capital into consideration. In real estate field, the cost of equity fund can not be ignored that the indices of EVA and EVA Spread are much more suitable.The main conclusions:The first conclusion is made through the analysis on the 5-day CAR after the refinancing announce of the listed company of real estate.1.The negative relationship between the size of refinancing and the stock price. 2. The negative relationship between the asset-liability ration and the stock price.3. The negative relationship between the ratio of the non-tradable shares and the stock price.The second conclusion is made through empirical analysis on the EVA and EVA Spread.1. The negative relationship between the refinancing ratio of secondary offering and the long-term performance of the listed companies.2. The negative relationship between the rate of change of accounting income and the long-term performance of the listed companies.This paper covers as followed:Chapter one:Introduction. This section introduces the frame, research background, problem solving and significance of this paper.Chapter two:Literature Review and theoretical basis. Theory analysis is introduced in this paper from home and abroad.Chapter three:Introduction on refinancing of the listed companies of real estate. This sector analyses the characteristics and the long-term trend of real estate industry, as well as the significance of refinancing.Chapter four:Two empirical analyses of the process from the short-term reaction of the stock price volatility and the long-term influence of corporate performance.Chapter five:Conclusions and suggestions.