An Examination on the Discount of Private Equity Placement: Viewpoint from Changes in the Make-up of Board of Directors and Supervisors, Enterprise Structure, Ownership Structure, and Business Valuation

• Main Authors: Shih-Yin Lin, 林詩茵
• Other Authors: Li-Chiu Chi
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/aaxgzx

碩士 === 國立虎尾科技大學 === 經營管理研究所 === 99 === 　　The revision of Taiwan’s Securities and Exchange Act which was approved in February 2002 made it possible for public companies to raise funds through private placement, creating a new source of funding for these companies. Unlike a public offering, private placement provides opportunities for stock price manipulation. The extent of the discount offered in private placement can impact on the rights of existing shareholders, and the change in the firm’s equity structure resulting from the private placement can lead to a struggle between shareholders and management for control over the company. 　　This paper is the first to examine the impact of　changes in a firm’s board of directors and supervisors and in its business valuation on the extent of the discount offered in private placement. The study also takes into account the impact of variables that include the enterprise structure and ownership structure. The empirical results show a positive correlation between the number of seats on the board of directors that private placement investors expect to receive and the size of the discount, which is the opposite of what the researchers expected to find. This study infers private placement investors do not have enough confident to the private placement enterprise management strategy; therefore, investors would like to monitor enterprise managers with effectively method. Regarding business valuation, a significant negative correlation was found between the PER valuation model and the size of the discount.