Journal Title
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Abbravation: Frontiers of Business Research in China
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Authors: Zuxuan Zheng Ye Zhou Da Li Tao Zhao
Publish Date: 2007/07
Volume: 1, Issue: 3, Pages: 422-
Abstract
In the Chinese stock market the price of exchangeable stock is determined by the discounted future uncertain cash flow while the price of noncirculating stock depends on per book value In general because investors holding noncirculating equity maintain the control power corporate finance and investment decisions reflect their interests The pricing mechanism of noncirculating stock violates the basic pricing principle of the capital market Therefore corporate finance decisions deviate from the NPV net present value As a result excessive equity financing problems would occur in the listed companies
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References
citation journal title=Journal of Financial Research citation title=Financial constraints in the listed companies investment Explanation from the views of structure of equity citation author=J Zheng X He H Wang citation volume=257 citation issue=11 citation publication date=2001 citation pages=9299 citation id=CR20
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