Comparison Analysis, The Economic Effects Of Equity Swaps Debt

In order to solve the problem of holding shareholders' impropriating funds from listed company, China Securities Regulatory Commission and State-owned Assets Supervision and Administration Commission of the State Council decided to adopt "Debt Payment in Stock" together on July 27th, 2004. HUNAN TV & BROADCAST INDUSTRY CO., LTD became the first experimental listed company. In order to solve the problem of making up the deficits and getting surpluses of state-owned enterprises, our country put "Debt to Equity" into practice in 1990s. And first listed company executed "Debt to Equity" on February 2nd, 2005. "Debt Payment in Stock" and "Debt to Equity" are two types of debt recombination, so this paper analyzes and contrasts marketable effect and financial effect in order to conclude whether they can promote the long-term development of enterprises.There are mainly five parts in this paper.Part one. The summaries of "Debt Payment in Stock" and "Debt to Equity". It introduces the definition, background, advantages and disadvantages, correlative experiences from foreign countries.Part two. The basic theories of "Debt Payment in Stock" and "Debt to Equity", including the theories of debt recombination and capital structure.Part three. The analysis and contrast of marketable effect of "Debt Payment in Stock" and "Debt to Equity".Part four. The analysis and contrast of financial effect of "Debt Payment in Stock" and "Debt to Equity".Part five. The advices for "Debt Payment in Stock" and "Debt to Equity".