A Case Study On The Financing Effect Of Preferred Stock Of Zhongshi Culture Listed In NEEQ

It is a consensus that financing is difficult and expensive for medium-sized and small enterprises.Meanwhile,in order to break down financing barriers,our government urgently needs to solve such outstanding problems.Preferred stock has the dual characteristics of stock and bond.To some extent,it can be used as a solution to expand channels for small and medium sized enterprises to obtain financing,which could effectively solve the financing problems.However,due to the late development of Chinese capital market,preferred stock has been absent from National Equities Exchange and Quotations.It was not until September 2015 that NEEQ issued Preferred Stock Transfer Guidance(Trial)of the National Equities Exchange and Quotations.As a result,the researches of Chinese scholars have some shortages in researching preferred stock issuance and financing effect in the National Equities Exchange and Quotations,so these theories do not have profound guiding significance.It is based on the above considerations that the issue of preferred stock financing of Zhongshi Culture is conducted a detailed study by case analysis method,method of comparative analysis and event study.Structure of the paper.Firstly,the development of the National Equities Exchange and Quotations and financing of listed companies are introduced in the part of financing theoretical basis of National Equities Exchange and Quotations,in order to illustrate the role of the National Equities Exchange and Quotations in the capital market and the financing scale and characteristics that the small and medium-sized enterprises through equity issues,bonds and preferred shares in National Equities Exchange and Quotations.Secondly,the development of Zhongshi Culture and the motivation,the setting of preferred stock terms and the influence of preferred stock accounting treatment errors of issuing preferred stock twice are emphatically analyzed in the part of case introduction,which could provide a solid foundation for the study of the financing effect of Zhongshi Culture preferred stock.Thirdly,through discussing the implementation effect of the two issues of preferred stock listed as bonds payable in the financing effect analysis part,including the impact of financial performance,equity structure and market effect,the research shows that the first issue of preferred stock did not bring positive market effect,but the second issue of preferred stock brought significant negative market effect;the two issues of preferred stock will probably lead to the voting right of preferred stock are restored;neither of the two issues of preferred stock has a significant positive impact on the financial performance.Finally,summarizing research results,and providing several measures and suggestions for further expand the preferred stock financing in National Equities Exchange and Quotations,including the company,market construction and government support,which could provide corresponding references for the subsequent companies issuing preferred stock.