The Empirical Research Of The Impact Of Internal Control Quality On Equity Capital Cost In Listed Companies

The capital market of our country has made remarkable achievements since its establishment.Nevertheless,problems are companied as well.Financial fraud cases are the most striking and harmful.Financial fraud cases not only make the image of China’s listed companies at a discount greatly but also seriously harm the interests of the investors.A serious impact on investor confidence in the market and hindered the healthy and orderly development of capital markets.Cost of equity capital is the important basis of enterprise financing decision and represents the investors’ expectations in the capital market for the risk level of listed companies.Its lower helps to improve the financing efficiency and Asset pricing level of listed companies and maximizes the enterprise value and promotes the healthy and orderly development of capital market.If the improvement of internal control quality of listed companies can reduce the cost of equity capital can be confirm,listed companies take the initiative to improve the quality of internal control for reducing the cost of equity capital and improving the financing efficiency.Win-win situation of listed companies and investors can be realized and it has important practical significance for promoting capital market healthy and orderly development.In this paper,combined with the efficient market theory,information asymmetry theory and principal-agent theory on the basis of referencing and studying relevant research literature at home and abroad,studying and analyzing the influence of the quality of internal control of listed companies to equity capital cost.Select the Shanghai and Shenzhen A-share listed companies 2012--2014 years data as the study sample for empirical study.The calculating cost of equity capital by PEG model as explanatory variables,the degree of realization of the five goals as explanatory variables,book-tomarket ratio,debt ratio,company size as a control variable,empirical analysis has been done by modeling of correlation analysis and linear regression analysis.The results show that improving the quality of internal control of listed companies can significantly reduce the cost of equity capital.Finally,on the basis of the summary of conclusions,the corresponding recommendations and deficiencies in the paper are proposed.