Research On The Motivation And Impact Of Equity Pledge By The Controlling Shareholder Of Taihe Grou

Equity pledge has become the prevalent financing technique for many businesses in recent times,and has been widely embraced by listed firms in China.Unfortunately,due to the lack of proper laws and regulations,the major shareholders of numerous companies are often exposed to the danger of pledging shares,which could result in a more fragile control of the business.A thorough investigation of the origins and effects of equity pledges by controlling shareholders can yield significant conclusions that can be employed as a guide for advancing the growth of listed companies in the same sector.By utilizing the event study method,we can delve deeply into the rationale behind Taihe Group’s equity pledge announcement,and condense it into four distinct components: market effects,corporate value,corporate financial risk management aptitude,and the division of control rights and cash flow rights.return rate,excess return rate,and other relevant factors of Taihe Group’s equity pledge behavior within a specific period of time to explore its impact on the market.Tobin Q’s method can be employed to investigate how equity pledge behavior influences a company’s worth,and the Z-Score model and financial indicators can be utilized to evaluate its capacity to regulate financial risks.Finally,we can also analyze how equity pledge behavior affects the control rights and cash flow rights of enterprises.An exhaustive examination has revealed that the equity pledge of Taihe Group’s controlling shareholders could result in a decrease in the company’s stock price,a drop in its value,and possibly heightened financial risks for the company.We propose that the company should bolster the oversight of controlling shareholders and strictly limit their equity pledge activities.Additionally,regulatory bodies should upgrade the market information disclosure system,and financial institutions should reinforce capital risk management.Furthermore,small and medium-sized shareholders and pertinent investors should augment their risk cognizance.