China's Management Buyout ( MBO ) Research On The Financing And Its Derivatives In

Recently, Management Buy-Outs, an "emerging phenomenon" in the capital market, has come to the attentions of many finance professionals. The healthy development of MBO, a special form of Leveraged Buy-Outs, depends a lot on the development of financing systems. Because our country has severe financial control policies and a credit system is not yet well established in the overall economy, the financing question in the MBO has become especially important. Therefore prompt studies of the financing question in our country's MBO have important and practical significance for its health development.After a review of related literature on MBO research, this thesis first studies the importance of financial innovations with emphasis on MBO trusts and MBO funds in solving our country's MBO financing question through cases and discussions. It then studies the repayment question following the MBO financing. Repayment is the continuation of finance and an essential part of the entire financing process. After a comparative study on the dividend data of a sample of public companies that have implemented MBO between 1999 and 2003 with those of all public companies we confirm there is indeed a high tendency of high dividends following the MBO financing. Finally, we use accounting research technique to study how high dividend policy affects a company's performance in order to understand how the financing question and associated high dividend policy influence company performance.Through research, we draw the following conclusions:1. Trust and the MBO fund may efficiently solve our country's MBO financing question.2. There is an obvious tendency of declaring high dividends after the MBO financing.3. MBO has a positive though not significant effect on the company's performance.Through analysis of above research conclusions, we propose several policy suggestions for the reference of policy-makers.