Equity Financing Preference Of Listed Companies In China

Capital is the blood of a company, and a company can not develop without capital, so financing is an essential content in modern company operation strategy. In the aspect of company financing, the way and structure of financing are the most important elements as well as the topics in academic field. This article is based on the fact that stock financing is leading the way in the structure of company financing, and analyzes the reasons and puts forward relevant strategies in order to help the company to improve the financing structure.Firstly, the article gives a presentation of company financing structure by introducing the definition of financing structure, the construction of capital market as well as the process of company financing and recalling the basic theory and new development of company financing like agent cost theory, information transmitting theory and control right theory. At the same time it points out the principles that a company should abide by according to realizing the targets of company operation.Secondly, the article does some comparative analysis between Chinese and foreign company financing structure, and draws a conclusion that the financing structure of the companies which are listed in stock market is not proper, because the ratio of inner resource financing and credit right financing is small, but stock right financing is a preferable way, also the article takes a detailed analysis in the contradiction of depending on stock right financing.Thirdly, it analyzes the reasons why the listed companies are fond of stock right financing, and draws a conclusion that the low obvious cost of stock right financing is a direct motive, and the opportunism tendency of managers is the internal element, however, the system and policy are the deep reasons; losing equilibrium of capital market blocks the companies to finance by bonds. The weakness of supervision gives the chance of financing by stock while the fact that managers being lacking of binding, inspiring and supervision is an inner base.In the end, based on the above analysis, the article puts forward the suggestions on how to perfect the financing structure of listed companies, from the aspects like perfecting the publishing of stock and the judgment system of profit, the releasing system of information, enhancing company bond capital by inner financing, dealing . with the problem of "inner person control", setting up effective inspiring and binding system, increasing the supervision power of investors, etc. in order to strengthen the construction of eternal environment, explore the channels of company financing, increase the binding and inspiration to manager with a result of perfecting the financing structure.