A Study On Preferred Stock Financing

Since the 2008 financial crisis,the financing problem of Chinese enterprises has become the first problem to be solved,this restricts the development of Chinese enterprises,thus affecting the whole Chinese economy,the social from all walks of life calls for the innovation of financial tools,therefore finding new innovations in financing is very urgent job at present.the preferred stock should be put forward,as a financial innovation tool used by actively advocating to ease and solve the related problem,since 2014,our country have issued <the Measures for the Pilot Administration of Preferred Stock>,<Issuing Preference Stocks of Listed Company Information Disclosure Guidelines>,<Guiding Opinions on Commercial Banks Offering Preferred Shares to Replenish Tier 1 Capital>,<Interpretation No.7 on Accounting Standards for Business Enterprises> and so on,it determines the position of the preferred stock in our country's legislation,It has laid a solid foundation for the development of preferred stock in China,however,there are some conflicts between these laws,which seriously affect the development of preferred stock in China,it can not be disguised that preference stock have unique advantages and play an important role in China's capital market,at present,the preference stock have just been introduced to our country,and the effect of all aspects after the issue is still to be studied.So it is of great significance to study the preferred stock at present.This paper studies the performance of all listed companies using preferred stock by the end of 2017,puts forward the theories basis for management using preferred stock financing to achieve the purpose of making the firm trusted and uses the preferred stock to create wealth for the company.Through the study of the preferred stock from 19 companies in this thesis,it is concluded that the effect of the use of preferred stock in the financing of Chinese Enterprises at present and can provide theoretical support and empirical support for enterprise management decision-makers who choose preferred stocks in the future,and put forward the countermeasure proposal.the first part of this thesis analyzes the present situation of the capital market,there are many problems in the preferred stock of our country.This thesis asks some questions why preferred stock has been put forward and called for the use,but it is especially slow development and put forward that the study of the effect of the preferred stock issuance in our country is of great significance,then summarizes domestic and international publications and carries on the literature review,last research methods,content structure and innovation points about this thesis are briefly described;The second part expounds the history of preferred stocks development in the United States and the development process of china's preferred stocks,then the theoretical basis,definition,characteristics and types of preferred stock are simply described.The thirdpart expounds the problems and reasons of using preferred stock to finance in China,about how to introduce preferred stock in 2013,why the restrictions on the issue of preferred stock are so high and the lack of preferred stock itself;The fourth part studies the whole company that issue preference shares by the end of 2017 as research samples,including the basic situation of its issuing company,the asset-liability ratio,financial burden,profitability before and after the issue and an empirical study will be done about the impact of the preferred stock issued on the stock price of the common stock,to explore the effect of preferred shares issued;The fifth part puts forward suggestion,promoting our country enterprise use preferred stock financing and promoting the development of preferred stocks,then it will put forward suggestions on preferred stock system,and put forward suggestions for regulators and the enterprises to make the good use of preferred stock,and writes the inadequacy and prospect about this thesis.The empirical results show that most of chinese companies issuing preference stocks are state-owned holding enterprises.Our country's standards for the companies of preference shares issued are very high,asset-liability ratio significantly reduced before and after the issuing preferred stocks,it optimizes the capital structure of enterprises,and through comparison between before and after the company's financial burden,some enterprise's financial burden has increased,some companies have performed well and their financial burden has been reduced,at the same time,although the profitability of enterprises has also been reduced,the reduction is limited,some enterprises also perform well and enhance their profitability,exclude the event that interferes with common stock price,after the issuance of preferred shares,common stock prices have changed,and the overall stock price is rising,it shows that issue preferred stock to common shares has a positive influence,the overall show that issuing preference shares can produce good effect on the company.