The Preferred Stock In The Water Industry Applications

The preference stock is one of the prevailing share forms in western countries, which plays an important role as same as common stock does. However, it doesn't exist in China's share holding companies as it do widely in western countries.Using the experience of the developing countries and the reality of our country as a reference, the paper make a research and discussion of the feasibility and operation model of the preference stock's applying in water treatment industry. In the first part, we make a brief introduction about theories on mature capital market in western countries, doing some analysis on the concept, features and functions about the preference stock, as well as its application abroad, so to prove that the preference stock mechanism plays an imperative role in improving the capital market, investment environment and strengthening the financial innovation. In the second part, we make an analysis on the development of the water treatment industry in China, its economic characteristic, its unique features and the operation model, especially make a clear statement about the problem existed in the reform of the water treatment industry. Focusing on the above questions, the paper expound that the preference stock mechanism is of great important in water treatment industry, the paper also make a discussion on the feasibility of carrying out preference stock system in the water treatment industry in a point of financing and industry integration. In the third part, further discussion on the conditions, operation models, principles, technique methods concerned are carried out according to the features of the water treatment industry which adopt preference stock mechanism. In the fourth part, the paper give some suggestion and questions on laws, accounting and tax policies, as well as supervision system concerned. Finally, the paper make a conclusion that the preference stock system should be set up in China for its importance in improving the security market structur. The author expect to make a clear understanding about the role of the preference stock's function in water treatment industry, and provide a certain theory basis about the adoption of the preference stock in water treatment industry.