Research On The Impact Of Management Power On The Cost Of Equity Capital Of Enterprises

As a reference indicator for enterprise investment and financing decisions,the cost of equity capital has always been an important topic in the financial field.The problem of inflated management power in modern enterprises may interfere with the right financial decisions,increase the various risks faced by investors,and ultimately affect the overall cost of equity capital of the enterprise.At present,the academic research on the relationship between management power and corporate equity capital cost is not sufficient.Therefore,it is necessary to deeply explore whether the expansion of management power will significantly increase the cost of equity capital of enterprises,and further explore new ways to reduce the cost of equity capital of enterprises.This thesis uses literature analysis and empirical research to explore the relationship between management power,enterprise equity capital cost and real earnings management of intermediary variables based on multiple linear regression and mediation effect testing.Firstly,the thesis sorts out the research results of relevant literature at home and abroad,and expounds the research ideas of this thesis.Then,the concepts of management power,real earnings management and enterprise equity capital cost are defined,and the theoretical basis related to the thesis is introduced.Then,the multiple linear regression method is used to verify the relationship between management power and the cost of equity capital of enterprises and the mediating role played by real earnings management,and further explore the influence differences of the relationship between the two under different property rights properties and different real earnings management directions.Finally,corresponding policy recommendations are put forward.The research conclusions show that:(1)the expansion of management power will significantly increase the cost of equity capital of enterprises;(2)self-interested management has a strong motivation and ability to manipulate the company’s profits through the means of real earnings management,which ultimately leads to an increase in the cost of equity capital of the enterprise;(3)Compared with state-owned enterprises,the influence of management power on the cost of equity capital in private enterprises is more significant;(4)Under the condition of positive real earnings management,the degree to which management power affects the cost of equity capital of enterprises is more significant.This study not only enriches the theoretical research on management power and corporate equity capital cost,but also strives to increase the attention of corporate shareholders and regulators to the problem of management power expansion through empirical research,and provides new and useful ideas on how to reduce corporate equity capital cost and improve financing efficiency.