Research On Convertible And Redeemable Preferred Stock Financing

In economic and social development,the enterprise financing way as time progress,in the traditional equity financing and debt financing,on the basis of a lot of hybrid leap in the capital market financing tools,such as convertible redeemable preference shares this new financing tool,the design of the terms and conditions of a more flexible,not only can meet the needs of both investment and financing,and more adapted to the change and development of the economic and social.For many scientific and technological innovation-oriented enterprises,their development is often subject to greater operational risks and the phenomenon of'capital fighting with each other" often occurs.Therefore,enterprises face greater financing pressure in the early stage.At the same time,in the early stage,the profit level of enterprises is low,internal financing is difficult to support the development of enterprises,debt financing will increase the financial risk,common stock financing will also lead to the decentralization of control,so some companies will choose the combination of equity and debt financing for financing before listing.Convertible and redeemable preferred shares can give full play to the advantages of both equity financing and debt financing,help enterprises facing financing difficulties meet financing needs,and overcome the shortcomings of traditional financing methods.So under the premise that the financing tool is feasible,how to arrange the specific financing motivation and application path of the enterprise in the actual financing process?What kind of financing effect will it bring to the enterprise?To explore convertible redeemable preference shares as the motivation,application path and the effect of enterprise financing way,combined with theoretical analysis,this thesis adopts case study method,in order to Meituan reviews and millet group(hereinafter referred to as the "millet")double case analysis as the research object,through two companies convertible redeemable preferred stock financing of the similarities and differences of the financing tools for analysis.Specifically,the thesis analyzes the motivation,application path and financing effect of convertible and redeemable preferred stock.Finally,the following conclusions are drawn:first,the main motivations for the issuance of convertible and redeemable preferred stock are to realize financing needs,to ensure the concentration of control,and to obtain the support of investors.Second,the specific application path is mainly from the term design to achieve financing,and carry out the selection and cooperation of investors,and finally through the listing of enterprises to achieve the conversion of preferred stock to common stock.Third,the financing method of convertible and callable preferred stock can meet the financing needs of enterprises,broaden the financing channels of enterprises,so as to improve the solvency performance of enterprises.In addition,the dual-class share structure can avoid the phenomenon of decentralized control right after listing.Four is simple compared to raise funds,use of funds,when enterprises from screening value of correlation between investors and their business,and reinforce the cooperation with investors,realizes the resources,information sharing,is more conducive to improve the market competitiveness of enterprises,optimize growth ability and profitability of financial indicators.The Meituan dianping selected and xiaomi in this thesis have similar financing difficulties.There are similarities and differences in the application of financing tools,which lead to similarities and differences in financing effects.Through case analysis,this thesis expounds the whole process research of convertible redeemable preferred stock as the main financing method of enterprises,in order to supplement the existing literature research on convertible redeemable preferred stock,and at the same time,give some reference experience to enterprises and investors who adopt this kind of financing instrument.