Research On The Way Of Equity Financing From Private Equity For Clarinda International Cosmetics Corporation

Private equity financing is the equity financing in unlisted companies to private form,with the exit mechanism in its investment through listing, mergers and acquisitions ormanagement buy-out, waiting for appreciation when investment exits profits. Theburgeoning development of the private equity industry to solve the financial predicament ofsmall and medium-sized enterprises to provide effective way, opening up a profitableindustry needs and financial capital requirements.This paper introduces the Clarinda International Cosmetics Company whether or not toaccept the private financing case, on the basis of the elaborates the concept from privateequity investment fund, valuation adjustment mechanism agreement and so on, closelycombined with the case at the same time, private investment risk and equity allocationscheme is analyzed. Then to provide some feasible suggestions to guard against financialrisks of valuation adjustment mechanism agreement that may be encountered in the processof practice. The end of the article will be charming Clarinda financing problems facing tothe beauty industry to abstract enterprises the way of accepting private equity. Theimproving countermeasures to be listed from the risk of valuation adjustment mechanismfinancing with recommendations on agreement law perfect.Specifically, in addition to the introduction and conclusion, there are five parts:The first part is Clarinda at the present stage of industry environment analysis detailswhere to begin from corporate profiles. By using Michael Porter’s Five Forces Model,Diamond Method and Saturation Analysis, the article research on enterprise managementenvironment and competitive advantage to improve Clarinda is on rising stage.The second part is Clarinda financing feasibility analysis, to the enterprise financingway, respectively, through the analysis of the cost of capital rate of bank loans andinferiority, expected return rate analysis and contrast analysis to find a way of the enterprisefinancing channel. Moreover, the next part focused characteristics and uses on privateequity financing with the introduction of valuation adjustment mechanism.The third part is the enterprise to accept private investment appraisal analysis, this partmainly introduces the definition of private equity funds, characteristics, operation mode andillustrates the meaning to bet on agreement making use of Von Neumann-Morgenstemutility by CAPM to research on the appetite of the enterprise risk preference.The fourth part is to analyze the Clarinda financing choice about equity distributionwhen accepting private equity (PE) financing, meanwhile it is valuation adjustmentmechanism that research on the road show equity allocation. Risk prevention make furthersteps on equity allocation by discussing the equity ratio in investor and corporation to put forward suggestions on financing risk Clarinda may adopt the measures of riskprevention, bet deal proposed risk prevention measures in the process of practice,strengthen the enterprise financial risk prevention and control, to create a good internalcontrol for the enterprise.The fifth part discussed on the development and the code of industry financing whenassuming Clarinda accept private financing. The essay make a charming picture to theenterprise brand effect, popularity and influence on enterprise financial management,accompanied unknown risk’s solution. To create a better environment of financing way tobeauty industry, the thesis analyzes the authority, the industry and enterprise itself operatingrecommendation to make a prosperous prospect.