Cost Of Equity Capital Of Listed Companies Research

More and more companies choose equity financing activities under the background ofeconomic globalization, so that the cost of equity capital becomes the important referencestandard and parameter of company to finance, invest and allocate dividend, as well as toassess the value of the company. In recent years, with the increasing globalization of theeconomic situation in China, the environment and factors that affect the cost of equity capitalof listed companies is also becoming increasingly complex. In the background of themonetary policy macro-control, the paper probed macroeconomic factors that affect the costof equity capital deeply between2007-2011, in order to interpret the implementation ofmonetary policy from a macro point of view on the cost of equity capital which estimated bythe capital asset pricing model.The paper summarized the relevant research literature on the cost of equity capital firstly,mainly around estimated model and the micro and macro factors that affect the cost of equitycapital of. Then the paper introduced China’s monetary policy theory and basic concepts ofthe four tools of monetary policy, the transmission mechanism of monetary policy, theasymmetric effect of monetary policy as well as the time lag effect. In the part of theoreticalanalysis, the paper explored monetary policy transmission mechanism of micro with theNeoclassical investment model, especially study the impact of interest rates conductionchannel and credit conduction channel on the cost of equity capital. The paper adopts themost basic and most widely estimated model of equity capital cost that the capital assetpricing model (CAPM) to calculate monthly cost of equity capital of78listed real estatecompanies in2007-2011. According to the time-varying beta, the paper using a single indexmodel to estimate monthly beta of78sample companies, the results basically conform to theideal value. In empirical part, the paper put the cost of equity capital monthly estimates andmacro indicators variables with time series in panel model, carries on the regression analysis,the empirical proved lag effect of monetary policy, through the regression analysis wascarried out on the monetary policy with different time, studies have shown that the time lageffect of financial deepening index (M2/GDP) for six months. The paper analyzed the conclusion from effectiveness of monetary policy and thelimitations of capital asset pricing model (CAPM). Finally the paper put forward someproposals to our country monetary policy, hoping to improve the people’s bank ofindependence, perfecting the monetary policy transmission channels, and improving theefficiency of monetary policy and capital deepening Chinese stock market.