Research On The Correlation Between Financial Health And Equity Financing Cost

The development of the stock market,the stock market behavior to achieve the planned economy to the market economy,progressive institutional changes,to achieve the elements of the market and liberalization of resources,is indeed a great innovation in China last century.With the continuous development of China's capital market,the stock market has become an important part of China's capital market.The level of financial health has a direct impact on the stock price of listed companies,and the stock price is positively related to the financing cost of equity.The cost of equity financing is an important reference factor for the financing decision of listed companies.Since Myers(1984)proposed the financing order,scholars at home and abroad have made theoretical analysis and empirical research on the influencing factors of equity financing cost in China,and the achievements are important both in theory and in practice.The results show that China's capital market financing order and Myers put forward the reverse,that is:China's capital market is the first to take equity financing rather than bond financing.Then we need to consider the relationship between financial health and equity financing costs,but in our current research results,the relationship between financial health and the cost of equity financing has no definite research results.Therefore,this paper on the basis of this study of financial health and equity financing cost correlation analysis,for listed companies to make the right investment decision-making has some theoretical and practical significance.In this paper,the O-J model is used to calculate the equity financing cost of the listed companies in the communications and related equipment industries.The financial health system of listed companies in China is constructed by solvency,profitability,operating ability,growth ability and cash flow respectively.Its 2011 to 2015,the financial indicators and equity financing costs of the correlation between the empirical analysis.This paper is divided into four parts:The first part is the introduction and the literature review at home and abroad.The introduction mainly includes the research background and significance of this paper,and summarizes the research ideas and methods of this paper,summarizes the shortcomings and innovations of this paper The literature review includes domestic literature research and foreign literature research.The two parts respectively introduce the domestic and foreign research results of financial health evaluation system and equity financing cost measurement model.The second part is the relevant theoretical introduction,The empirical part includes the case analysis part,which is also the most important part of the paper.It is divided into three modules,the first module is the sample selection and the data source,The second module is the correlation test of the sample,the linear regression analysis;the third module is the empirical analysis of the communication and equipment manufacturing industry.The second module is the correlation test of the sample and the analysis of the linear regression.The fourth part is the proposal of the enterprise to improve the financial health level,reduce the cost of equity financing,and the conclusion,the main innovation and the shortcomings and prospects of the research.Finally,this paper draws the following conclusions:the control of equity concentration,the proportion of institutional holdings,market information factors and the level of audit opinion and other factors under the conditions of the overall point of view,the higher the level of financial health of the sample company's marginal equity financing The lower the total cost,the net asset growth rate of the total asset growth rate is negatively correlated with the marginal equity financing cost,and the relationship between the cash flow index and the marginal equity financing cost is not significant.