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Non-circulating equity and excessive equity financing

Abstract

In the Chinese stock market, the price of exchangeable stock is determined by the discounted future uncertain cash flow, while the price of non-circulating stock depends on per book value. In general, because investors holding non-circulating equity maintain the control power, corporate finance and investment decisions reflect their interests. The pricing mechanism of non-circulating stock violates the basic pricing principle of the capital market. Therefore, corporate finance decisions deviate from the NPV (net present value). As a result, excessive equity financing problems would occur in the listed companies.

摘要

中国股市中, 流通股的价格取决于公司未来不确定现金流期望值的折现: 非流通股的价格则依据每股净资产来制订。 通常非流通股股东拥有公司的控制权, 因此公司的投融资决策体现了非流通股股东的利益。 非流通股的定价制度有违资本市场对资产定价的基本原理, 所以公司的投融资决策也偏离了公司财务理论所确定的净现值标准, 导致上市公司存在过度股权融资问题。

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Author information

Correspondence to Zuxuan Zheng.

Additional information

Translated from Shijie Jingji Wenyuan 世界经济文源 (World Economic Forum), 2004, (4): 41–50

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Keywords

  • non-circulating equity
  • excessive equity financing
  • net present value
  • Chinese stock market

关键词

  • 非流通股
  • 过度股权融资
  • 净现值
  • 中国股市