The Case Study About Market Timing Selection Of Eurasia Group Debt Financing

Since May 2013, the financial market funds rate and overnight bank lending rates rise across the board. Data shows, June 20 th bank lending rate reached 13.44%.It indicates the shortage of fund is coming. Financing is an important financial activity of enterprises in business activities, enterprises can raise fund through various ways of financing and the financing channels, to maintain long-term development of enterprises.Nowadays, the development of China's capital market has become increasingly mature, especially the stock market, plays an important role in economic development. And the scholars inland and abroad research more about equity financing, they think it is existent about market timing. Therefore, this paper selects the problem of debt financing research. Based on a large amount of document collection and reading, I found that domestic and foreign scholars study for debt financing, it is more concentrated in the governance structure, the relationship between business performance and risk theory, less research is concentrated market timing. But there are still some research shows that debt financing also exists market timing. Firm choices about bonding issue in the lower risk, lower cost of case, the research in this aspect is added and finished. In this paper, the research processes: it is analyzed with debt financing environment and debt financing risk characteristics, risk free rate, and managers of non rational state of risk aversion, the theory and case are combined, trying to find the enterprises in debt financing is how to use market timing, so to help enterprises more rational about debt financing, improve the efficiency of financing.The research results showed that:1 the existence of debt financing and market timing. 2 Market timing and debt financing environment, changes in interest rates, the management state of risk aversion are related. Then the risk factors are focused on. When the market interest rate is low, enterprise usually can choice about debt financing channels; when the market interest rate is higher, enterprises generally do not choose debt financing. And the management of financing will also be affected its irrational factors. Finally this paper carried out the divergent thinking on the basis of the research, and put forward some suggestions for reference.