Manager Fraud,Nature Of Ownership And Capital Cost

Mechanisms on the capital market is not well completed in our country at present,the fulfillment mechanism contributes litle to the protection of investors'rights.Management fraud occurs frequently.The existence of problem executives send a bad signal to the market and reduce the investor's confidence,consequently,investors set a higher required rate of return for their capitaLManagement fraud not only damage the interests of investors,but also hamper the health development of the capital market.On this basis,this paper examines the relationship between management fraud(datas from 2014 to 2015)?nature of ownership of listed companies and their capital cost.First of all,I examin the relationship between management fraud and capital cost,and the result indicates that management fraud will increase the cost of debt capital and equity capital and reduce the proportion of long-term debt,and the cost of debt capital and equity capital raises when the times of manager fruad raises and the degree of manager fruad raises,and the proportion of long-term debt get higher when the times of manager fruad raises and the degree of manager fruad raises..Secondly I examin how nature of ownership performs its role on the relationship between management fraud and capital cost,and the results indicates that state ownership obviously has influence on it.State ownership of listed companies can exercise its influence upon management fraud,and relieve the bad influence which management fraud imposes on the cost of debt capital and equity capital and reduc the proportion of long-term debt.This paper contributes to the study of management behavior and cpaical cost.Listed companies can establish a positive image via strengthening the internal system construction,so that the cost of debt capital and equity capital will be ruduced and the company can get long-term debts more easier,all this will not only helps providing protection to investors,but also helps making the company more valuable.