Diversification and Capital Cost of Agricultural Listed Companies??qBased on External Financing Analysis

The diversified operation of the agricultural listed companies can reduce the business risk of the enterprises to some extent, so as to have an impact on the capital cost of the enterprises .This paper studies the relationship between diversification and capital cost of agricultural listed companies.Through the empirical research on 412 valid data of agricultural listed companies in Shanghai and Shenzhen from 2005 to 2016.This paper makes an empirical study on the relationship between the diversification of agricultural listed companies and the cost of capital.The results show that the degree of diversification of agricultural listed companies is negatively correlated with the cost of debt, common stock capital and weighted average capital cost.On the basis of this conclusion, this paper provides some basis for our agricultural listed companies to choose the strategy of diversification, and puts forward some suggestions for the development direction of our agricultural listed companies. ForewordAgriculture is the foundation of the national economy and its importance is self-evident.As a leading enterprise in China, the development of agricultural listed companies has an important impact on the sustainable development of agriculture and the stable operation of the national economy.With the recovery of the Chinese economy, the internal competitive pressure in the Chinese market has gradually increased.However, the total scale of the agricultural listed companies in China is relatively small, and the profitability of the listed agricultural companies is on the low side.The ability to resist risks is low.higher degree of diversification.The characteristics of the industry with better solvency [1].Therefore, the strategy of diversification has gradually been attached importance to and implemented.The diversification strategy of agricultural listed companies in our country mostly presents the trend of compound diversification, and adopts the equity financing method, because of the agricultural listed companies under the diversification strategy.Shareholders see no advantage over other competitors specialising in a particular industry, in which case the return on investment demanded by investors increases and the cost of capital increases.At present, the research of diversification strategy is mainly carried out from two angles, motivation research and management consequence study, which focuses on the influence of diversification on the enterprise value at home and abroad.By studying the relationship between the diversification of agricultural listed companies and financial risks, Zhang Huaqing and Zhang Min found that the diversification of agricultural listed companies into non-related business financial risk [2].Su Xin(2017)and Liu Haolong studied the relationship between diversification and corporate performance from the perspective of executive ownership, and found that the relationship between product diversification and corporate performance is not a simple linear relationship, but an inverted "U" relationship [3].As to the relationship between diversification and capital cost, foreign scholars think that diversification can reduce the cost of capital.After studying the relationship between diversification strategy and corporate structure, Barton and Gordon found that the degree of diversification was positively correlated with leverage (debt level) and negatively correlated with risk.That is, 917