Research On The Motivation And Effect Of GZ Company’s Issuance Of Convertible Bonds

Convertible bonds are a hybrid financing tool.Its characteristics are: when the issuance conditions of convertible bonds are met,its holders can convert shares under certain circumstances,and convert the bonds into stocks of the issuing company.Thereby obtaining shareholders’ equity.Convertible bonds have always been favored by financiers and investors,because it has the advantages of lower financing costs,delayed equity dilution,and less debt pressure for financiers.For investors,convertible bonds have equity conversions and are more flexible.In foreign countries,convertible bonds have a long development time and a relatively complete market,and their development time in the country is relatively short.Moreover,compared with the role of convertible bonds in the international market,domestic maturity,risk prevention and There is considerable room for development in product richness and other aspects.The first attempt of China to issue convertible bonds was the “Baoan Convertible Bonds” issued by Shenzhen Airport in 1992.Therefore,as far as the current domestic development is concerned,the research on the causes and economic consequences of convertible bonds is of great theoretical and practical significance.Compared with foreign capital markets,China’s capital market has developed for a relatively short period of time,so the market is not standardized and the laws are not perfect.Chinese companies are also facing many severe tests in the process of financing by issuing convertible bonds.Under this background,this article takes the case of GZ company issuing convertible bonds for financing as a research object.After studying and understanding the related concepts of convertible bonds,the relevant domestic and foreign research literature and basic theories are collected and sorted out.Then combine the industry and business characteristics of the target company,review the entire process of issuanc e,deeply analyze the reasons why the company chooses the convertible bond financing method and the feasibility of the issuance,and study the economic consequences of the financing behavior on the company in detail.Combined with the specific case of GZ C ompany,the research conclusion is drawn and targeted recommendations are made.This paper uses the quantitative and qualitative analysis methods such as case study method,financial index method,comparative analysis method and event research method to analyze and discuss the motivation,feasibility,impact situation and effect of GZ company’s issuance of convertible bond financing in turn.Among them,the enlightenment of convertible bond financing and suggestions are given.Finally,the whole case analysis is concluded,and the following conclusions are drawn: First,convertible bonds have lower financing costs than other financing methods.Mainly reflected in the low coupon rate of convertible bonds makes the issuing company pay lower interest costs;Sec ond,the conversion of convertible bonds will dilute earnings per share,but the restrictions on the timing of the conversion and the timing of the conversion The dilution of equity has a certain buffer effect;third,the issuance of convertible bonds has a positive effect on the financial performance of the issuing company;fourth,the issuance of convertible bonds is good news for the issuing company,so it will be in a short time There is a role in promoting the stock price of the issuing company.Throug h the research in this article,I hope to provide a reference for the choice of corporate financing methods.