Research On The Influence Of Controlling Shareholder’s High Proportion Equity Pledge On The Company D’s Value

Equity pledge refers to the behavior of the pledger to use equity as a pledge to integrate funds.It has developed into a financing method preferred by many enterprises due to its advantages of strong liquidity,low cost,few restrictions and easy operation.But along with it,many companies are also facing problems caused by a high proportion of equity pledges.High-proportion equity pledge companies are significantly more sensitive to stock price fluctuations than ordinary companies.When stock prices fluctuate sharply,they are likely to fall into the predicament of forced liquidation.Due to the existence of a dominance in my country,the influence of the controlling shareholder’s equity pledge behavior on the listed company will affect the whole body.Therefore,the influence of the controlling shareholder’s equity pledge behavior studied in this article on the company’s value is conducive to effective management of the company and maintaining the stable development of the capital market.This article takes D company in an industry with a generally high equity pledge rate as the research object.First,it introduces the institutional background and theoretical basis of controlling shareholder equity pledge financing,and then reviews the motivations and risks of equity pledges,principal-agent issues,and agency The literature on the research content of the relationship between equity pledge and company value.Then,based on the analysis of the corporate governance status,pledge situation and motivation of D company,from the three perspectives of book value,economic added value and Tobin’s Q value,the impact of equity pledge on the company’s value is analyzed,and the equity is explored.The way the pledge affects the value of the company.The study found that whether it is to analyze the company’s financial indicators and economic value added,to examine the short-term effects through the event research method,or to analyze the long-term effects through Tobin’s Q value,the impact of the high percentage equity pledge behavior of the controlling shareholder of D company on the company’s value Most are unfavorable.In order to verify the causality,the available industry data was added to Tobin’s Q-value analysis as a comparison,and the changes in the industry were analyzed by comparing with similar companies in the industry that did not have a high percentage of pledges.In addition,short-term event research effects can also provide a certain basis for the existence of relationships.Finally,in view of the equity pledge crisis faced by D company,this article puts forward suggestions from the internal governance and external management levels.Through studying the impact of the equity pledge behavior of the controlling shareholder of the case company on the company value,it is hoped that listed companies and controlling shareholders will pay attention to the high proportion equity pledge behavior,and correctly understand the impact of equity pledge financing business.