Equity Structure,Accounting Conservatism And Cost Of Equity Capital

The development of modern companies is closely related to capital.The capital is the premise of the company's daily operation and management and the basis of expanding the scale,and is the material basis of the company's future growth.The key to solving the fund problem is the financing.Different from the conclusion of Pecking Order Theory,equity financing is the main way of financing in China.The minimum rate of return required by investors is the cost of equity financing,that is,the cost of equity capital.Therefore,studying the cost of equity capital is the key to solve the financing problem.Only by reducing the cost of equity capital can the profits of enterprises be increased.Scholars at home and abroad have always paid attention to the cost of equity capital.For the study of the cost of equity capital,most of the studies focus on the impact of equity structure on the cost of equity capital,and the impact of accounting conservatism on the cost of equity capital,however,few scholars study the relationship between equity structure and equity capital cost from the angle of accounting conservatism.Therefore,this paper attempts to explore the impact of equity structure on the cost of equity capital on the basis of a certain level of accounting conservatism,and make a useful supplement to the relevant research.In this paper,8578 non-equilibrium panel data are selected from Shanghai and Shenzhen A-share listed companies in 2008-2016 after the split share structure reform.According to the theoretical analysis,the research hypothesis is put forward and the model is established.Through descriptive statistics,correlation analysis and regression analysis,the empirical analysis results are obtained.Through empirical analysis,we draw the following conclusions: under the same conditions,the cost of equity capital increases with the increase of equity concentration,and decreases with the increase of equity balance.If other conditions are the same,the higher the level of accounting conservatism,the higher the equity concentration can restrain the increasing effect of equity concentration on the cost of equity capital,and the higher the level of accounting conservatism,the higher the equity balance degree can reduce the cost of equity capital.Through empirical research on the relationship between equity structure,accounting conservatism and cost of equity capital,this paper enriches the existing research literature and provides a new way for listed companies to solve financing problems.