Characteristics of common stock financing, characteristics of equity financing

Common equity capital raising has the following advantages:

1. The capital raised by issuing ordinary shares is permanent, has no maturity date, and does not need to be returned. This is extremely beneficial to ensure the minimum capital needs of the company and maintain the long-term stable development of the company.

2. There is no fixed dividend burden for raising funds by issuing ordinary shares, and whether dividends are paid and how much they are paid depends on whether the company is profitable and has operational needs, and the financial burden brought by operating fluctuations to the company is relatively small. Since common equity financing does not have a fixed maturity pressure to repay principal and interest, the financing risk is less.

3. The capital raised by issuing ordinary shares is the most basic capital of the company, which reflects the strength of the company and can be used as the basis for other ways of financing, especially to provide protection for creditors and enhance the company's ability to raise debts.

4. Because the expected return of common shares is higher and can offset the impact of inflation to a certain extent (usually during inflation, when the value of real estate appreciates, the value of common shares also appreciates), so it is easy for common shares to absorb funds.

Disadvantages of Common Equity Financing.

However, there are some drawbacks to using common stock to raise capital:

1. The cost of capital of common stock is higher. First of all, from an investor's point of view, investing in common stocks is riskier and requires a higher return on investment. Second, for fundraising companies, common stock dividends are paid out of after-tax profits, unlike bond interest that is paid before tax as an expense, so they are not tax deductible.

In addition, the issuance of common shares is generally more expensive than others**.

2. Raising money with common shares will add new shareholders, which may disperse the control of the company. In addition, the new shareholders will share in the company's accumulated earnings before the issuance of new shares, which will reduce the net earnings per share of common shares, which may trigger a share price increase**.

Pros:1Light burden; 2.Low risk; 3.It is conducive to enhancing the company's strength and enhancing the company's debt financing ability; 4.To a certain extent, equity financing is conducive to investors to avoid inflation risks; 5.There is no expiration date and no return is required.

Cons: 1high cost of capital; 2.It is easy to disperse the control of the company. 3.As a result, the company's original shareholders' earnings per share were diluted.

What are the fundraising characteristics of the issuance of common shares** compared to the absorption of direct investment?

Legal Analysis: Equity financing has the following characteristics:1

The funds raised are permanent. 2.There is no fixed dividend burden, and the amount of dividends paid and whether they are paid or not depends on whether the company is profitable or not and the company's operating needs.

3.Enterprises do not need to repay the principal when using equity financing, and investors need to rely on the circulation market if they want to recover the principal.

Legal basis: Article 137 of the Company Law of the People's Republic of China states that the shares held by shareholders may be transferred in accordance with the law. Article 138: The transfer of shares by shareholders shall be carried out in a lawfully established trading venue or in other ways as stipulated in the law.

The first level of margin trading is leveraged, and the so-called leverage means that it can expand profits and losses. Dividends vary depending on the company's earnings.

When it comes to margin trading, there should be a large number of people who either know nothing or don't understand anything. The content of today's article is my experience for many years, and I remind you to read the second point carefully!

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2. What are the skills of margin trading?

1.Take advantage of the financing effect so that the benefits will be more.

Let me give you an example, for example, if the funds in your hands are 1 million yuan, in your opinion, the xx** performance is very good, you can take out the funds in your hands first, and then you can mortgage the ** from the brokerage, and then finance and then buy this**, when the stock price **, you can share the extra part of the income.

Take the example just now to explain, assuming that xx** rises by 5%, the original income is only 50,000 yuan, but the margin operation can change this status quo and make you earn more, and when you fail to judge correctly, it is impossible to earn, and you will only lose more.

2.If you don't want to take risks, you want to choose a more conservative investment, feel that the medium and long-term market outlook is gratifying, and then go to the brokerage to inject funds.

Integrating funds means that you can mortgage the ** held in your hand as a long-term value investment, and you don't need to add additional funds when you enter the market, and you can't forget the brokerage after making a profit, and you can pay them part of the interest to achieve more victories.

3.Using the securities borrowing and lending function,** we can also make a profit.

For example, for example, the current price of a stock is 20 yuan. After depth, it can be out, and it is possible to reach around ten yuan in the future for a period of time. Therefore, you can go to the ** company to borrow 1,000 shares of the stock, use 20 yuan to sell it in the market, get 20,000 yuan of funds, in the case of the stock price ** to about 10, you can take the opportunity to buy 1,000 shares of the stock through 10 yuan per share, and return it to the ** company, the cost is 10,000 yuan.

Therefore, the difference between the before and after operations in the middle means the profit part. Naturally, there will be some fees for securities borrowing and lending. After using this operation, if the stock price is not only not **but ** in the future, then after the contract expires, it will cost more money to buy back ** and return it to ** company, resulting in losses.

Hello, the underlying stocks of margin trading are screened and generally meet the following conditions:

Listed on an exchange for more than three months.

**The outstanding share capital of the underlying shares shall not be less than 100 million shares or the circulating market value shall not be less than 500 million yuan; The outstanding share capital of the underlying shares sold by financing shall not be less than 200 million shares, or the circulating market value shall not be less than 800 million yuan.

The number of shareholders shall not be less than 4,000.

In the past three months, there have been no of the following;

1) The average daily turnover rate is less than 15% of the turnover rate of the benchmark index, and the average daily turnover is less than 50 million yuan.

2) The deviation between the average daily rise and fall of the average price and the average price of the benchmark index is more than 4% (3) The fluctuation range reaches more than 5 times the fluctuation range of the benchmark index, margin trading is leveraged trading, and the risk is relatively large, so there are certain requirements for the target **, and only margin trading can be carried out if the requirements are met. Low commission account opening private, if you don't know, you can ask me.

Answers]: a, b, c, d

Advantages of common equity financing: There is no fixed interest burden. There is no need to repay the principal. The risk is smaller. Answering can increase the credibility of the company. There are few restrictions. file and diversify enterprise risk.

Answer]: B, E

The cost of capital is high. In general, the cost of common equity financing is greater than that of debt funding. This is because handicraft dividends are paid out of after-tax surpluses, while the interest on debts is deducted before tax, and dividends have no tax deduction effect; In addition, the issuance cost of ordinary Biyou sedan shares is also relatively high.

The issuance of off-line common shares tends to diversify control.

1. Long-term. This method of financing is permanent, that is, there is no specified time limit, and there is no need to return the principal.

2. Irreversibility. Enterprises do not need to return the principal in this way of financing, and if investors want to recover the principal, they need to trade through the circulation market.

3. No burden. This method has a fixed dividend burden, and whether and how much dividends are paid is determined according to the company's business needs.