Relationship Between Industry Expertise And The Cost Of Equity Capital Based On Ownership Structure

The Capital market is a full of information flow and cash flow of the market, informationguide the capital flow from the investors to the funds of listed companies, so as to achieve themost basic of the capital market financing function. Equity capital cost is commonshareholders of the requirements of lowest return rate, it is based on information especiallyaccounting information and to the future of a kind of expectations, and can be more directmeasurement of financing costs, the financing cost not only affect the company investmentdecision, but also can reflect the financing ability.The demand of audit is produced by the separation of ownership right and agencyrelations with asymmetric information in the company. The auditor based on financialstatements reflects the historical information form verify, improve the quality of theinformation for the decision makers and provide professional services. Because of its strongerprofessional competence, the firm with industry expertise can make the external people ofenterprise internal personnel to provide reports has the high trust, which can reduce theinformation asymmetry problem, reduce the risk of moral hazard information or thepossibility, that the investors less demanding remuneration rate of investment, reduce therights and interests of the enterprise cost of capital.The current literature research the rights of the cost of capital, mostly focused oncorporate governance and internal control and information disclosure, but few scholars fromthe perspective of ownership structure, research the relationship between the industryexpertise and the cost of capital. In our country present stage in the securities market, firmscan reduce the industry expertise enterprise equity capital cost, the influence how the equitycapital cost? In this paper, we use listed company between2009and2010A shares as theresearch samples, and making use of SPSS software through, in order to provide the empiricalverification the relation between them. In combination with the enterprise ownership structure,analyzes different characteristics of the enterprise, the equity balance degree, and the boardmembers under ownership, firm industry expertise to equity capital cost difference in thedegree of influence. The results of the study show that, firm industry expertise can reduceenterprise rights cost of capital, and in the state-owned enterprise, ownership restrictiondegree is high, there is not a single controlling shareholders, not members of the board of thesample group holdings, the lower the cost of capital enterprise rights role even moresignificant.