TheApplicationResearchofPreferred StockFinancing OfABCCompany

In this paper, We take ABC company using preferred stock financing as an example, we analysis the elegant and arrangements when companies using preferred stock financing carried out, and further analysis of the impact on the company’s capital structure, cost of capital, solvency after preferred stock issuance and the reaction of the market made, and the risks faced by investors as well as issuers, regulators and revelation Subscriber inquiry carried out accordingly.We found that the issuance of preferred stock will help to improve the company’s capital structure and governance structure, lower financing costs, to meet long-term demand for capital will help the company in the long-term stable funding so that the financial structure has been optimized to improve the company’s ability to resist risks. We believe that our company’s preferred stock financing will serve to further deepen the reform of shareholding role. Mainly for this new way of financing the company’s financing will become more flexible, optimize the company’s capital structure, reducing the company’s debt ratio, contribute to the further development and expansion of the company, improve market competitiveness; make investment investors more diverse, broader investment channels, increasing the proportion of increase in direct investment, the stock market in order to ease the current pressure on the stock market to be further standardized and stable, and further stable development of the capital market.