Convertible Bond Financing To Enhance The Value Of The Company

Chinese listed companies have been wild about stock quota and stock supplement regardless of the significance of the relationship between capital structure and corporate value in their financing behaviors all along. With the raise of the threshold for stock quota and stock supplement and the improvement of the rules for issuing the convertible bonds, convertible bonds have been the favorite well-tried financial instrument. However, Chinese listed companies still have not enough rational knowledge about the relationship between capital structure and corporate value. Their options to issuing the convertible bonds are only because they are short of capital.Referring to the financial theory and combined with the corporate governance theory and agency theory, the thesis analyzes the practice of the convertible bonds financing in Chinese stock market, surrounding financing cost, financing risk and the relationship between capital structure and corporate value tightly. The thesis figures out, to keep away financing risk, convertible bonds financing can advance the corporate value from two aspects. On the one hand, convertible bonds financing can improve financial status; on the other hand, convertible bonds financing can ameliorate the corporate governance.The meaning of the thesis is to make suggestion to Chinese listed companies. Listed companies should choose the opportune moment and constitute apt treaty for the purpose of optimization of the resource scheme, according to the actual demand for the capital.