Analysis Of The Applicability Of Preferred Stock Financing In The Expressway Industry

As the capital market changing,a variety of new financing ways are developing rapidly.The preferred stock financing is due to have a combination of the nature of equity financing and debt financing,so it has a high recognition in the field of foreign financing.In China,the State Council issued the Guidance to the Pilot Project of Preferred Stock in November 2013.In March 2014,the China Securities Regulatory Commission issued the Regulation of the Pilot Project of Preferred Stock,which laid the foundation for the financing of preferred stock in China.Since 2014,several Banks and non-bank companies have raised preferred stock.However,what financial conditions and operating conditions are suitable for preferred stock financing? What about the cost of preferred stock financing? And what about the applicability of the preferred stock financing of highway industry? Around these problems,this paper chooses Zhongyuan Expressway as an example,analyzing the applicability of the preferred stock financing in highway industry.So it can provide guidance and reference for other companies in the industry when choosing preferred stock.This paper firstly analyses the financing motivation and the feasibility of Zhongyuan Expressway.Then the analysis of the preferred stock financing is about the plan design and the cost.The paper analyses the applicability and influence from the perspective of the capital market,the financial characteristics of the enterprise and the view of common shareholders finally.It can be concluded that after this preferred stock financing,Zhongyuan Expressway adds liquidity,extends financing channel and improves the enterprise financing structure.But preferred stock financing is still in a risk,only choosing the right time and designing the suitable plan of financing options can effectively avoid the risk.Thus is good for the company of high-speed industry which has intention to preferred stock financing.