Analysis On The Behavior Of Private Placement Discount Rate Of New Third Board Companies

Private placement plays an important role in corporate financing for companies traded on the new third board,which is flexible and loose to deal with financing problems.However,the characteristic that the price of private placement is lower than intrinsic price of the stock may distort market pricing.Therefore,combining the theory with empirical research,this essay aims to analyze the effect of shareholders of private companies,the goal of private placement,the liquidity of stock and the scale of finance on the discount rate of private placement.The data are retrieved from companies that implement private placement successfully on the new third board during 2017.After screening and empirical analysis,conclusions can be drawn as following:1.The participation rate of majority stockholder in the private placement has a positive influence on the discount rate because of benefit transfer.2.The percentage of institutional investors has a negative impact on the discount rate of private placement for profit maximization.3.The relationship between liquidity supplement and discount rate is positive while the connection of project finance with discount rate is opposite.4.The more liquid of the stock is on the new third board,the lower the discount rate is decided.5.The scale of financing has a positive effect on the discount.In addition,this essay provides some normative proposes for the private placement market of the new third board.