Sichuan Changhong Electric (600839) Stock Price Volatility Of Empirical Research

With the foundation and development of the Chinese stock market, the study on stock price lucubrated continuously. However, nearly almost studies concentrated on the macro models and rules. The purpose of this paper was to provide a few concrete solutions to the theory of maximization of shareholder wealth in practice, after analyzing the followed factors, such as the features, reasons and mechanism of price movement of stock of SCCH(SICHUAN CHANGHONG ltd) company. At first, the author analyzed the features of price movement of SCCH stock and the movement of Shanghai A Class Index, then treating the Shanghai A Class Index as the macro market, deduced the relation between the Shanghai A Class Index and SCCH stock's price, and showed that SCCH stock price was affected weakly by the index. Later, the paper studied the relation between stock price and the interest of the one year fixed deposition, Thirdly, the author studied the relation between the Electronic Industry Index and SCCH stock price through the liner regression, and thought that the SCCH stock price was highly correlated with the Electronic Industry Index. Finally, the author studied the effect on the SCCH stock's price caused by the accountant data, dividend policy, investment and corporate governance, then drew the inherent relations between the above factors and SCCH stock price.Additionally, according the special phenomenon of stock price manipulated by the bankers in China, this paper analyzed historic data of ten shareholders who had owned much more shares of SCCH than others, and deemed that the SCCH stock price was manipulated by the bankers. Based on the above analysis, the paper deduced the mechanism of price movement of SCCH stock according to the related theories and scholar's recent achievements. The author pointed out the kernel contend of the mechanism was composed of the followed factors such as, efficient market theory, relation between stock value and stock price, supply and demand relation, investment portfolio theory and arbitrage theory. Finally, the author summarized the overall analysis, and thought if we want to put the maximization of shareholder wealth theory into practice, then three measures had to be undertaken. The first was the firm should seek the suited solutions by itself; The second was it was necessary to reform the unreasonable ownership structure, And the third was the government should strengthen the corporate governance in code.