Case Study For P Company Offering Corporate Bond

Financing is an essential business operation and development activities of an enterprise,because lower cost and larger amount of financing can effectively increase liquidity of the enterprise and vitality of continuing operation.In January 2015,Corporate Bond Issuance and Transaction Management Measures was published,the new version of corporate bond,regardless of financing cost or financing scale,has more certain advantages than other financing methods.Meanwhile,the cost of bond financing is a stressful factor for financing activities,and plays a key role in the bond successful or unsuccessful issuance.Therefore,it is necessary to make a forecast for the cost of corporate bonds financing.This paper integrates the scholars' research on the factors influencing the cost of bond financing and the knowledge from study and work of the author,and then put forward nine influencing factors of bond financing cost.The external factors,incluing macroeconomic,policy environment and environment of industry and regional economic.The internal factors,incluing corporate governance,operational condition,finance,development strategy,ability to resist risks,and debt performance.This paper makes quantitative and qualitative analysis for P Co.with the nine factors,and combine the AHP to evaluate the weight of each factor.After that,we can determine which cost level in same industry,same type of bond will P Co.bear.The conclusion can be confirmed by the actual data in the bond market.Finally,the author makes some recommendations for bond financing cost,unsuccessful issuance,issuing timing and investor protection.The contribution of this paper is to help enterprises to analyze their own strengths and weaknesses before issuing bonds,so enterprises can determine the expected level of financing costs and set reasonable bond coupon rate,all of these help to avoid unsuccessful issuance of bond.