A Summary of Discussion on Share Equity Financing Preference Problem

Modern business financing theory discloses that the financing order for firms is as follows: internal source financing, short-term liability financing, long-term liability financing, and share equity financing. But because of excessively low cost of share equity financing in China, unreasonable share equity structure, imperfect financing market, absence of equity main body and serious inner person controlling, there is a strong preference to share equity financing for listed companies in China. To analyze the reason for this preference and solution to it will play a positive role in promoting China’s listed companies normalized development in future and consummation of these governance structure.