An Analysis of Financing Decisions of Taiwanese Listed Companies – Bond, Convertible Bond and SEO

• Main Authors: Jian-You Shen, 沈建佑
• Other Authors: 邱顯比
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/76984198161219852965

碩士 === 國立臺灣大學 === 財務金融學研究所 === 100 === This paper employs nominal logistic model to analyze the main factors that influenced the financing decisions of companies, based on the samples of Taiwanese listed companies once issued stocks, convertible bonds and straight bonds during 2001-2010. The results show that the main determinants of financing decisions can be roughly attributed to the theory of Life Cycle, Financial Health, and Market Timing proposed by the extant literature. However, due to the variation of financing purpose and different nature of each country’s financial markets, the results of each explained variable are not totally identical to those of foreign countries. In Taiwan, firms with higher operation risk tend to issue convertible bonds to enjoy the upside potential of stock price. And, firms with higher cash balance will prefer SEO because of managers’ aggressive investment strategies. Moreover, although some firms with higher debt ratios issue stocks to deleverage their capital structure, most firms are likely to issue straight bonds. My explanation is that the firms with high leverages tend to repay their maturing debts by new debts. In other words, high leveraged firms will issue either straight bonds to keep their financial structure or stocks to deleverage, and avoid using convertible bonds which may deteriorate the companies’ stable financial structure.