An Investigation of Relationship between Private Equity Offering and Operation Performance

• Main Authors: Yu-Ping Wu, 吳毓萍
• Other Authors: Jian-Heart Chou
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/80025753069681919047

碩士 === 國立高雄第一科技大學 === 財務管理所 === 97 === The purpose of this study is to explore characteristics of private placement of shares by listed and OTC companies in Taiwan from 2006 to 2008. As inquired for private placement cases from Market Observation Post System, there are 157 samples. Eight profitability indices including debt ratio, return on assets to net operating incomes before deducting depreciation expenses, return on assets, net operating income rate, return on equity of stockholders, net income rate, earnings per share, and mart-to-book value ratio, are used to measure whether operating performances are improved after private placement. The measurement method is to compare financial ratios of three years, including the year before and the year after private placement. The study method adopts non-parametric statistics to make empirical exploration of various hypotheses. Empirical results are as follows: 1 Long-term debt paying ability, cash flow, final profitability, and the performance of utilizing assets to create profit are significantly improved than those before private placement, suggesting that hypothesis 1 – operating performance after private placement of issuing company is better – is valid. 2 Regarding the performance of issuing company after private placement by testing issue at premium or discount, variables of net operating income rate, return on stockholders'' equity, and earnings per share one year after private placement have reached a significant degree, indicating the degree of improvement of operating profitability and profit generated from utilization of assets of the company issuing shares at premium is better than issuing shares at discount, suggesting that hypothesis 2 – the degree of improvement of operating performance after private placement of a company issuing shares at premium is better than the company issuing shares at discount – is valid. 3 Regarding the improvement of private placement share ratio to performance, earnings per share have reached a significant level of 50% one year after private placement, indicating the market valuation toward degree of improvement is that lower share ratio is greater than higher share ration, suggesting hypothesis 3 – the operating performance after private placement of a company with higher private placement share ratio is better than a company with lower private placement share ratio, is not valid. Key words: Listed company, private placement of shares, profitability indices, characteristics