Study On The Economic Consequences Of CJ Company's Private Placement Financing

With the completion of the share-trading reform,the private placement financing has gradually been favored by domestic listed companies.Compared with other equity refinancing methods,private placement financing has the advantages of high efficiency,low threshold and few constraints,etc.,so it has developed rapidly in China's capital market.However,what are the economic consequences of private placement financing?what is the capital cost of implementing private placement financing for a listed company?What kind of reaction will the capital market cause by private placement?What are the risks of private placement financing?What is the performance of a listed company's financial performance after private placement financing?These issues are deeply concerned by all parties in the capital market,including listed companies.If a listed company ignores its economic consequences when financing through private placement,it may adversely affect the future development of the company,causing waste of investor resources,and even become a"money-making"tool for listed companies,which is ultimately not conducive to the benign development of private placement market.Therefore,it is of great theoretical and practical value to systematically study the economic consequences of private placement financing of listed companies.By combing the relevant literature,it can be found that the study on the economic consequences of the private placement financing of listed companies is mostly concentrated in the field of empirical research,and the study on specific cases is relatively rare.Based on this,this paper takes CJ company,a leading enterprise in the domestic steel structure industry,as the research object,and studies the economic consequences of its private placement financing.This paper first reviews and summarizes relevant research literatures at home and abroad.Then,it defines the related concepts and explains the related theories.After that,this paper enters the case study part of CJ company's private placement financing,it firstly analyzes and sorts out the basic situation of CJ company,the motivation of the private placement financing,the financing plan and the implementation situat:ion.Then it analyzes and evaluates the economic consequences of CJ company's private placement financing from four aspects:capital cost,market reaction,financing risk and financial performance.Finally,this paper draws four conclusions through research:first,the capital cost of CJ company's private placement financing is higher than the capital cost of debt financing;second,CJ company's private placement financing has a positive market announcement effect;third,the related risks of CJ company's private placement financing are relatively low;fourth,CJ company's financial performance after the private placement financing has declined.In addition,based on the research conclusions,this paper puts forward four suggestions on how to effectively raise funds through private placement:one is to fully consider the capital cost of private placement;the second is to strengthen the prevention of the risk of private placement financing;the third is to appropriately introduce strategic investors to participate in private placement;the fourth is to improve the performance level of enterprises after private placement financing.The research in this paper can provide a useful reference for domestic listed companies to effectively use the private placement for equity refinancing,and promote the more reasonable and effective operation and development of the private placement market.