Research On The Financing Motivation And Influence Of YK Company Issuing Convertible Bonds

Convertible corporate bond is a financing tool with both creditor’s rights and option attributes.Due to the continuous introduction and implementation of relevant policies and provisions in recent years,it has increasingly become one of the financing tools with certain weight in the capital market at this stage.The advantage of convertible bond financing is that it has lower requirements on financial indicators than equity financing.Bond issuing companies only need to bear lower interest expenses every year and can produce tax credit effect.After entering the stock conversion period,they will dilute the rights and interests of common shareholders relatively slowly.The disadvantage of convertible bond financing lies in the risk of forced redemption,conversion failure and poor expected return of fund-raising investment projects when entering the stock conversion period.As a double-edged sword,convertible bond,a compound financing tool,can not only help the company successfully raise development funds to help it improve its comprehensive competitiveness,but also give the company a heavy blow at the time of issuance failure and make it fall into financial difficulties.Therefore,it is worthy of the attention of listed companies that need financing.Traditional Chinese medical device companies in the medical industry generally have large capital demand,long product R &D cycle,high operation risk and general credit status.It is difficult to finance because there are few venture capital institutions that can meet the financing needs of medical device companies in China.Since the outbreak of COVID-19 in early January 2020,the development of China’s medical industry has been accelerating.Especially,medical device companies have been actively producing new production lines during the epidemic period,and become the backbone of the Sniper War.As a catalyst for technological innovation and accelerated centralization in the medical industry,the epidemic has made many medical device companies enter the fast lane of development.YK company,as a typical medical device company,chooses convertible bond financing to supplement development funds.Whether its financing method is applicable to other medical device companies is worthy of attention.At present,domestic scholars mostly use empirical analysis and case study methods to study convertible bond financing,and stay at the level of performance evaluation and financing effect.Although there is an upward trend in the research on convertible bond financing after 2017,there is still less involved in the Financing Motivation and impact,Based on the analysis of the industry characteristics of the company,this paper makes a case study on the financing behavior of YK medical device companies issuing convertible bonds from the perspective of Financing Motivation and influence,draws the relevant research conclusions of convertible bond financing,and provides certain policy suggestions to the company’s stakeholders,in order to give some reference to other medical device companies in the industry.