Equity Refinancing Of Listed Companies On Business Perform

In recent years, chinese listed companies’financing exists obvious equity financing preference,chinese listed companies usually prefer equity financing way to raise funds. Equity refinancing hasright issue,public offering and convertible bonds three main ways. Equity financing should providedevelopment funds for companies, and enterprises should be improved, but the data show after theequity refinancing the majority of listed company’s performance falling instead of rising. Therefore,in our unique financing system and the securities regulatory environment, research why there isequity financing preference phenomenon, how the equity financing impact the company’soperating results, how can we improve the behavior of China’s securities market is particularlyimportant.This paper uses qualitative research combined with quantitative research, normative researchcombined with empirical research. First, from a qualitative point of view found that chinese listedcompanies resist equity refinancing preference and after the equity refinancing companies’performance were falling. Then describes the factors that affect the company’s equity refinancingperformance from a theoretical perspective. Then select the specific empirical research data analysishow refinancing affect company’s performance.This paper selected the manufacturing industry as the research sample and selected return onnet assets, total assets net profit margin, return on assets, operating margin for the financialindicators. First, use the descriptive statistics comparing the manufacturing industry which occurredrefinancing in2007before and after the refinancing(2006-2010) of financial indicators changes,preliminary found the equity refinancing resulted in declining corporate performanceconclusions.Then build a model and define variables, using multiple linear regression analysis ofthe factors derived equity refinancing performance change found that free cash flow before equityrefinancing have a negative influence for the company’s performance after the equityrefinancing.The proportion of large shareholders and refinancing before gearing ratio and corporategrowth levels have a positive impact for the company’s performance after the equityrefinancing.Indicates that the agency cost model and signaling theory can better explain China’slisted company’s performance change after the refinancing.Finally, according to the research process and the conclusions explains the reasons of thedecline in equity refinancing corporate performance.Then combined with China’s securities marketenvironment and listed companies own characteristics, proposed policy recommendations so as toregulate and improve the financing behavior of the listed company again, and promoting the development of the refinancing market.