Research On The Financing Efficiency Of Convertible Bond Issued By Listed Companies

As a dual-character financing tool,convertible bonds not only possess the characteristics of corporate bonds,but also have the right to be converted into stocks.For investors,this is a tool that can preserve capital and income;for issuers,this is a low-cost financing method;for shareholders,it can delay equity dilution to a certain extent.As a result,convertible bonds have become popular in the market,especially in foreign markets,but their development in my country is still relatively slow.In recent years,with the continuous adjustment of convertible bond policies,especially the introduction of new refinancing regulations in 2017,my country’s convertible bond market has begun to develop.So it is worth studying how efficiently the company issues convertible bonds to raise funds.As the first convertible bond purchased by credit in China in 2017,Oriental Yuhong is also the leader in the waterproof industry and is quite representative.This article first reviews the domestic and foreign literature and theories related to convertible bonds and refinancing efficiency.At the same time,it sorts out the development background of the refinancing and convertible bond systems of listed companies and understands the credit purchase policy.Then through the case analysis part,this article first introduces the basic situation of convertible bond financing in combination with case companies,and then from the perspectives of fund raising and fund allocation,based on the five aspects of financing cost,project investment income,financial performance,wealth effect and financing risk Analyze the financing efficiency of Oriental Yuhong’s convertible bonds.The research conclusions of this paper are as follows: Oriental Yuhong’s convertible bond financing has eased the financial pressure of Oriental Yuhong to a certain extent and can reduce financing costs.From the perspective of capital allocation,the project investment income is good,which brings short-term shareholder wealth increase,and at the same time avoids the financing risk of control transfer.However,there are also cases where the return rate of individual fundraising projects is not high,and the short-term solvency and operating capabilities of the company are still relatively weak.Of course,this is also related to the investment period in the early stage of the project.Combining with the financing situation of Oriental Yuhong’s issuance of convertible bonds,this article also puts forward some suggestions on how companies can improve the efficiency of convertible bond financing.When companies issue convertible bonds,they need to choose a reasonable conversion price and ingenious issuance timing based on their own circumstances,not only to obtain low-cost financing,but also to improve the efficiency of capital allocation,and ultimately improve financing efficiency to achieve corporate development.