| The financing cost usually shows the base funding of the company,one the other hand,it shows the expecting rate of return from the investor.Therefore,it is not only relevant to the valuation of the business,all sorts of problem of the structure decision of capitals,but also directly effects the final call of the investment projects.The investor often comparatively analyses the financial information between companies and industries,the comparatively analyse reference indexes are often made to be used in credit and investment decision makings.The comparability of the company financial provides the investors all the information they required,in both research and risk analyse ways.Although the system of corporate financial statements is still somehow flexible,example as amortization of assets.These kinds of preparation of statement directly reduces the comparison within the information provided by the corporate finance.The reduction of the financial comparison increased the difficulties of gathering and analysing the investor information,even more critically it raises the risk of the Capital Market.It creates unseen issues of capital allocations and financing costs.This research discusses the financial comparability the influence mechanism of the cost of financing of listed companies.In relative of shareholders and creditors,shareholders are more likely to be mass dissipation,and creditors are more of a credit institution such as bank.It is more professional in information gathering.The information risk of intangible cost is very little,the debt covenants by the creditors are used to restricted the responsibilities of the corporate borrower.Hence,the financial comparability of dependency level is more depending on the creditors than shareholders.However,for large shareholders directly involved in the company's business decisions,they acquired the company internal information whether creditors are far higher than the quantity or quality,this will to some extent weaken the cost of equity financing for financial comparable dependence.Therefore,this research is trying to thoroughly discuss the otherness of the financial comparability in cost of equity and cost of debt base on financing cost of the company.In the research target group of securities market,this written task applies all the quoted company between 2005-2014,based on the method of surplus and income estimation,by using residual income model to estimate the cost of equity financing,depending on interests' ratio to estimate the debt financing,The empirical study on the influence mechanism of financial comparability on corporate financing costs.Specific research methods are as following: first of all,from the perspective of shareholders and creditors,respectively,to the test of comparability of financial,it will be able to exam both equity financing costs and the cost of debt financing;secondly,to construct a choice model to test the comparability of financial comparability between equity and debt;thirdly,including the endogenous problem may exist in the original model: variables omitted variables and model with correlation,comparable with the financial cost of financing is also affected by the same factors,financial comparability and financing cost there is a two-way causal relationship,this research use instrumental variable,propensity score matching and first order difference method to resolve the problem of the existence of endogenous problems in the model;lastly,by using different dimensions of indicators to switch the original financial comparability,cost of equity financing and debt financing costs,in order to predict the robustness result test.Research results shows: first,to improve the comparability of finance,whether it is the company's equity financing costs or debt financing costs are reduced;second,there are significant differences in the financial comparability between the two financing costs,and the cost of equity financing is more sensitive to the change of financial comparability. |
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