Analysts Predict And Equity Financing Costs Forchinese Listed Companies

With the rapid development of China’s economy,listed companies face the problem of high cost of equity financing and low profitability.How to reduce the cost of equity financing of listed companies has always been a concern of the party and the state.As the capital market intermediaries of the analyst is to connect investors and listed companies link.Foreign scholars have found that analysts predict the financing of listed companies have a real effect.The purpose of this paper is to predict whether Chinese analysts can reduce the cost of equity financing of listed companies.This paper mainly adopts the method of combining theoretical analysis with empirical analysis.In the theoretical analysis,based on the theory of capital market intermediary theory,the efficient market hypothesis and the herding effect in behavioral finance,this paper analyzes three paths that analysts predict to reduce the cost of equity financing.In the empirical analysis,this paper selects 1419 listed companies in Shanghai and Shenzhen as samples,and establishes two regression models to study the influence of analyst forecast and star analyst forecast on the cost of equity financing respectively.The calculation of the cost of equity financing of listed companies does not use the usual foreign discount model,but follows the current domestic mainstream calculation method that finding the impact of equity financing costs of various factors,and then adding up the factors.Analysts’ forecasts and other variables are derived from the Guo tai’an database,the Wind database and the Zhaoyang sustainability database.This paper selects the number of analysts’ forecasts as an indicator of the number of analysts’ forecasts and uses the accuracy of the analysts’ forecasts as an indicator of the quality of the analysts’ forecasts.The results of the multiple linear regression show that after analyzing the ten variables,such as controlling the proportion of institutional investors,solvency,company size,profitability,turnover,beta,account ratio,financial leverage.Forecasting is negatively correlated with the cost of equity financing,that is,analysts’ forecasts will indeed reduce the cost of equity financing of listed companies.Among them,the star analysts predict the cost of equity financing a better explanation,the effect is more significant.This shows that our analyst predicts of the cost of equity financing of listed companies also have a real effect.