The Analysis Of Preferred Financing In ZOSE Culture

Preferred stock emerged in the United Kingdom in the 1920 s and has developed into a unique hybrid financing instrument in the capital market over the past two hundred years.In western capital markets,in particular,many companies have used the issue of preferred shares to finance their growth.By contrast,preferred stock is a new financing option for Chinese enterprises due to the short development time of China's market economy.On November 30,2013,the state council promulgated the guidance of the state council on carrying out preferred stock pilot program,which provided institutional guarantee for Chinese enterprises to choose preferred stock financing.As a whole,China's preferred stock financing is still in the initial stage and requires certain strength of the issuer.However,with the continuous development and improvement of China's market economy,on September 21,2015,the national stock conversion system issued the guidelines on preferred stock,and the preferred stock system entered the new third board market.Although the practice of preferred stock financing is gradually rising in China,the total amount is relatively small and it is still in the stage of continuous development.In terms of the research of preferred stock,the financing of preferred stock in China is mainly based on theoretical research,with part of case studies and empirical analysis limited to a few individual cases.Therefore,starting from the case of ZOSE issuing preferred shares,this paper studies the motivation and effect of the company's financing process by analyzing the process and issuing terms of preferred shares,and provides some guidance and reference for China's neeq enterprises to conduct preferred shares financing.As one of the first neeq companies to issue preferred shares in China,ZOSE Culture raised sufficient funds for the development and expansion of the company after the initial issuance of preferred shares was completed in 2015.With the further development of the enterprise,in order to expand the market share of the cinema and obtain more financial support,ZOSE Culture conducted the second preferred stock financing in 2016.Therefore,this paper selected the typical ZOSE Culture as a case to analyze the motivation and effect of preferred stock financing of neeq enterprises in China,and summarized a series of experience to provide reference for other enterprises to issue preferred stock.As a whole,China's preferred stock financing is still in the initial stage and requires certain strength of the issuer.However,with the continuous development and improvement of China's market economy,on September 21,2015,thenational stock conversion system issued the guidelines on preferred stock,and the preferred stock system entered the new third board market.Chapter one of this paper reviews the literature from the three aspects of preferred stock financing motivation,the financing effect of neeq enterprises and the market performance after financing,and puts forward the research ideas and methods of this paper after reviewing the research status.The second chapter defines the concept and characteristics of preferred stock,expounds the relevant basis: agency theory,priority financing theory,control right theory and signal transmission theory,and introduces the motivation of issuing preferred stock in neeq enterprises.The third chapter introduces the background of the preferred stock issue of ZOSE Culture,including the company profile and financing process of ZOSE Culture,and expounds the basic situation of the preferred stock financing of ZOSE Culture in detail.The fourth chapter is a case study,which analyzes the motivation,effect and risk of ZOSE Culture issuing preferred shares in detail,which is the core content of this paper.First of all,the paper introduces the reasons for the issuance of preferred shares in ZOSE Culture from three aspects:replenishing capital gap,maintaining equity concentration,and promoting stock price rise.Secondly,the capital structure,profitability index and growth ability index of ZOSE Culture before and after the issuance of preferred shares are analyzed,and the financing cost and financing income of enterprises are analyzed,so as to comprehensively explain the financial effect of the issuance of preferred shares.Finally,risk analysis is made from three aspects: insufficient dividend,operation and management and capital cost.Chapter five is the conclusion and inspiration,mainly comes to the establishment of preferred stock recoverable terms,find the right investment crowd and clear project investment direction and other three aspects of the conclusion,for the future of other enterprises preferred stock financing provides guidance value.Through the case study of ZOSE Culture,this paper indicates that the issuance of preferred shares guarantees the stability of corporate control,improves the short-term solvency of enterprises,improves the capital structure,reduces financing costs,provides funds for the construction and development of enterprise projects,and improves the short-term investment value of the capital market.