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Perfecting Legislation Of Preferred Stock Redemption System In China

Posted on:2016-08-07Degree:MasterType:Thesis
Country:ChinaCandidate:Y Y XiaoFull Text:PDF
GTID:2296330479988414Subject:Law
Abstract/Summary:PDF Full Text Request
Preferred stock, injected new blood into the market economy of our country, also brings plenty of opportunities to financing companies and investors. Investment gets returns, also accompanied by risk. Preferred stock takes interests to the company and the shareholders, at the same time it maybe damage the interests of someone. This paper is targeted at redemption of preferred stock; discuss perfecting legislation to preferred stock redemption system from the perspective of protecting rights and interest of preferred shareholders.Preferred stock system has various effects. First, it can help enterprises breakthrough “financing difficult” situation. Preferred stock has priority, and a variety of forms. Through the company and investors’ contract can present different forms, it can satisfy the demands of different enterprises financing, at the same time meet the needs of different investors on the investment returns and risks. Second, it helps the corporate governance. Enterprise through the issuance of preferred stock can increase the capital strength. Preferred shareholders have no voting rights, meanwhile, instead of decentralized control of the company, the company centralized decision making. Third, it’s helpful for the stable development of capital market. Investment in common stock is to rely on market price fluctuations to obtain benefits more, and the market price of common stock can be wide fluctuations, this is not conducive to the healthy development of capital market. The application of the preferred stock can change the market mechanism, and promote the stable operation of the capital market. The last and most important, preferred stock system is helpful to balance the rights of the parties. Application of the preferred stock has enriched our country shares of preferred stock form, to a certain extent to raise and the conflict between the parties on the profit distribution.System of preferred stock redemption also has its important value. On the one hand, as an important part of the system of preferred stock, preferred stock redemption system plays the various effects of preferred stock. The author proceeds from the role of the preferred stock in the right balance, because the role associated with the protection of preferred shareholders interests directly, and also can contain multiple aspects of preferred shareholders interests’ protection. On the other hand, a certain sense, preferred stock redemption is an exit mechanism of preferred stock.Generally speaking, the role of the preferred stock redemption system performance as follows: first, the preferred shareholders can not only obtain fixed income during the preferred stock investment, but also can gain premium options to earn interest by it. Second, preferred shareholders can do risk aversion by redeem system, or access to new investment opportunities. Third, when the shareholders’ rights are violated, it can be a relief means.In order to better protect the rights of preferred stock shareholders while preferred stock playing its important roles, this paper attempts to explore perfecting legislation of preferred stock redemption, make the preferred stock redemption system under the law, at the same time in the meet the needs of corporate finance, and protect the rights of the preferred shareholders at utmost ground.
Keywords/Search Tags:Preferred stocks, Right balance, Preferred stock redemption, Legal Perfection
PDF Full Text Request
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