A Study On Corporate Financing Based On Behavioral Finance Theory

Since Harry Markowitz fathered the portfolio theory at1952, that laid the foundation for the modern finance theory, a series of theories, such as MM theories, CAPM, EMH, OPM, Agency Theory, Pecking Order Theory, Asymmetric information theory, corporate governance, Corporate Right of Control, and so on, established the basic framework and theoretical foundation of modern finance theory, but all of them are based on the assumptions of Rational Individual and efficient market. However, as Professor Simon said, the "bounded rationality" is closer to reality.Modern enterprise has confronted the dilemma of financing since the moment of birth, the dilemma of financing, i.e. the problem of capital structure, has also been a hot spot in the field of theory and practice. Behavioral finance is the scion of cognitive psychology and traditional financial theory, at present, the theoretical research of corporate financing behavior based on the behavioral finance mainly focus on:(1) the research of financing behavior under the premise of managers are rational and the market is irrational;(2) the research of financing behavior under the premise of managers are irrational and the market is rational; but there is a scarce study on both of them are irrational, which is closer to reality. The primary purpose of this paper is, on the basis of previous studies, focusing on the financing behavior of both market and managers are irrational, which expands the scope of study of behavioral finance. Through mathematical reasoning and constraint solving, quantitative analysis and qualitative analysis and other methods, do exploratory study, by introducing a hindering factor function h(γ,·), deduced the financing decision model under the constraints of which managers and market both are irrational, and verified the internal logic of model, and interpret the meaning of the model from economics and policies, and then apply the derived theoretical results to analyze and interpret listing corporations financing irrational behaviors, especially the preference of equity financing, and finally according to the existing problems, put forward related suggestions and countermeasures. The study has a positive practical significance, and provides theoretical support for the further study of corporate financing behavior under the condition that managers and market are irrational.