Market timing behavior of financing behavior and company
|School||Yunnan University of Finance|
|Keywords||Equity market timing Listed companies Secondary equity offering|
Based on the M-M theory, by relaxing and widening of its assumptions andrestrictions, the scholars shed the lights on the capital structure of company withmultiple perspectives, approaching the theories such as trade-off theory, agent theoryand pecking order theory etc. It is discovered that during the time when the stockprice are overestimated or the period of bull market, the listed companies apt to takethe policy of Secondary Equity offering with issuing equity, in contrast, when thestock prices are underestimated or in the bear market, the choice is the equityrepurchase. Equity marketing timing was issued to explain the phenomena with theinsight of the Behavioral Finance. The capital structure of the firm is considered as aresult of the accumulation of the taking equity marketing timing. Equity marketingtiming explains the forming of company capital structure well. It is on the edge of thefield of Behavioral Finance that the effect which caused by the deviation betweenasset pricing and its true value to the decision of company financing and its capitalstructure.On the acceleration of developing the capital market and the processing ofimproving the Socialism Market, there are huge differences of the financingenvironment, financing, and the financing decision of the listed companies betweenChina and the developed countries whose capital markets are relative mature. Thestrong speculations and the developing market make the research of Chinesecompanies’ behavior of financing based on the EMH far away from the reality. In thispaper, we start at the point that the ineffective of the Chinese capital market, and theirrational estimating on the stock, we analysis the listed companies who executedSEO or implementation of the allotment during the period from2000to2010. Focuson the Equity marketing timing effects on capital structure and the financing decision.In this article, we state the background and the meaning of the research, andreview the literature of the company financing home and abroad in the first twochapters. In the third chapter, we apply the theories and make a summary, which is based by the modeling of experience study which allocated in the chapter4. We takethe regression with the data of the companies who issued SEO from2000to2010.Finally, we use the result of the positive study and give the advice on policy.