Research On The Governance Effect And Economic Consequences Of Convertible Bond Financing Of Baosight Software Co.,Ltd.

Convertible bond is a kind of financial instrument between stock and bond.Convertible bond originated in the United States.In 1843,the United States issued the first convertible corporate bond in the world.Up to now it has a history of more than 170 years.Its development is relatively mature and it has become an indispensable financial means for companies.However,Chinese convertible bond market started late.Some listed companies issued convertible bonds in the early 1990 s so that they can raise some funds for financial need.In 2000,after China Baoan Group Co.,Ltd.failed to convert,listed companies were allowed to issue convertible bond for the first time,which has sent a wave of convertible bonds financing in Chinese listed companies.Through the analysis of issuing convertible bonds by a single listed company,this paper explores the governance effect of this financing behaviors and a series of economic consequences brought by the governance effect.This paper takes the issue of Baoxin convertible bonds by Baosight as the research object,using the methods of literature analysis,case study,event study,etc.,to analyze the governance effect,market reaction,impact on shareholder interests,changes in financial risk,and the causes of dilution effect.This paper is divided into six parts: the first part is the introduction,which mainly introduces the background and significance of this paper,literature review,innovation and research route.The second part describes the overview of convertible bond financing and theoretical basis.The third part talks about the background of the case,the basic situation of Baosight,the motive of convertible bond financing,and the general situation of the issuance of Baoxin convertible bonds.The fourth part explores the corporate governance effect of issuing Baoxin convertible bonds,this part mainly analyses from the perspective of large shareholders,governance efficiency and shareholder structure.The fifth part is the economic consequences of Baoxin convertible bonds,mainly including the market reaction of issuing convertible bond,performance analysis based on EVA and the impact on shareholders' interests.The sixth part are the conclusion and enlightenment.Finally,this paper draws the following conclusions:(1)the issuance of convertible bonds has a negative announcement effect on Baosight in the short run.(2)Compared with equity financing,issuing Baoxin convertible bonds can alleviate the dilution effect.(3)The issuance of Baoxin convertible bonds did not bring definite financial risk to the enterprise.(4)Baoxin convertible bonds can adjust the capital structure of the enterprise and improve governance efficiency.