Research On The Motivation And Effect Of Implementing Market-oriented Debt-equity Swap

The past decade has seen a dramatic surge in investment in my nation,and the financial system has grown exponentially,leading to a worrying rise in corporate debt.A high debt ratio not only affects the operation and competitiveness of enterprises,but also poses major risks to the entire financial system.China must direct more capital to hightech and other burgeoning industries in order to effectuate economic structural adjustment and upgrade simultaneously.However,the debts of traditional industries occupy a large amount of funds,making it difficult to meet the financing needs of emerging industries.The Chinese government has put forward a range of plans,with three reductions,one reduction and one subsidy being the main focus;market-oriented debt-to-equity swaps being a key element.Debt-to-equity swaps,based on market forces,can diminish the debt risks of businesses and financial institutions,foster economic restructuring and improvement,and enhance financial risk prevention and control,thus fostering economic stability and sustainable growth.The distinction of this policy debt-to-equity swap is remarkable.preceding one due to its marketization being its most noteworthy characteristic.This paper,with AECC as its research object,initially examines A synopsis of the domestic and international literature on the impetus,execution,and functioning of debt-to-equity is presented.swaps,while simultaneously sorting out the pertinent theories and concepts related to debt-toequity swaps.Subsequently,I present the two rounds of debt-to-equity swaps in my nation,respectively,and contrast the disparities between them.AEC Power Co.’s fundamental state then became apparent.,Ltd.The market-driven debt-to-equity swap plan was brought into effect.its implementation agency,pricing and exit methods,and real-time process,as well as the national policy,industry background,and the company’s financial situation,was made.An analysis of the impetus behind AECC adoption Beginning with the four facets of a market-oriented debt-to-equity swap,a commencing process is initiated.development and development status.The utilization of the event study method,Z-value model,financial index analysis,EVA value analysis,and gray theory was employed to analyze AECC performance post-market-oriented debt-to-equity swaps,with the results being agr.The implementation of market-oriented debt-to-equity swaps has had a beneficial effect on the company.AECC market response and financial performance in the short term,particularly in terms of solvency and cash flow,which have been significantly enhanced.However,in the long run,the increase in the company’s profitability and EVA value is not obvious.The research ultimately concludes that AECC market-oriented debt-to-equity swap can be a catalyst for the growth of such swaps,thus diminishing corporate debt ratios,enhancing corporate debt repayment and development capabilities,and fostering market rivalry and capital markets growth;however,there are certain restrictions.(2)The operation mode of the debt-to-equity swap of AECC has obvious advantages and a high degree of reference.The market can benefit from the introduction of debt-to-equity swaps.beneficial effect on Proposals are put forth to expand corporate financing pathways and augment equity structure.to aid enterprises Executing market-oriented debt-to-equity swaps in the future,and facilitating the process.systematic advancement and enhancement of my nation’s market-oriented debt-to-equity swap.