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1、Abstract: The financing is not only a prerequisite for enterprise production and business activities, it is to ensure the smooth progress of corporate reproduction as well as foreign investment. Many financing companies, from reality, a reasonable choice in favor of financing their own development a
2、nd effectively be combined to reduce financing costs and financing risks aim to achieve the best economic efficiency of enterprises. Paper Keywords: financing, equity financing, debt financing equity financing means that the way to issue shares to raise funds to pay dividends. (A) direct investment
3、definition: refers to investment investor in one economy in an enterprise in another economy made, and such long-term investment so that investors can effectively influence decisions about the management of the enterprise. Statistically, if the investor holds 10% or more of a business stake, it will
4、 be considered as long-term effective in influencing business decisions relating to the management of enterprises. Direct investment includes equity capital, reinvested earnings and other capital. Equity capital includes the share capital held by branches, subsidiaries and associates companys stock;
5、 reinvestment of undistributed income refers to the branch profits and investors from affiliated or associated companies should have but did not distribute dividends in the form of profits; other capital involved between long-term or short-term debt transactions, including loans between parent compa
6、nies and their subsidiaries, associates and branches. Absorbing direct investment is an enterprise in accordance with the joint investment, co-operation, a total of risks, profit sharing principle to absorb the country, legal entities, individuals, foreign investors invested a financing. applicabili
7、ty and conditions: For the financing side: main requirements: the use of absorbing direct investment companies raise capital should be non-stock limited liability company. need to ask: Corporate donors invested capital in cash, physical assets, intangible assets when, must meet the needs of enterpri
8、se production and management and research development. digestion requirements: enterprises to raise investment capital, if it is physical and intangible assets, must be able to digest in technology. For investors: investor enterprises with management rights. Good business conditions, profitability a
9、nd more parties share profits according to the investment proportion, but poor business conditions, years of losses, or even bankruptcy liquidation, the investing parties bear their proportion of investment in the investment limit losses. BreakDown investors are: cash investments, investment in kind
10、, industrial property investment, land use rights and investment. Investment capital investment mode in addition to national provisions, shall be approved by the established companies in the enterprise contract and articles of association provisions in detail. For BreakDown, Chinas Company Law provi
11、des as follows: Shareholders in kind, industrial property, non-patented technology or land use rights as capital contributions must be valued evaluate and verify the property, may not be overvalued or undervalued, and for its legally procedures for the transfer of property rights. Industrial propert
12、y, non-patented technology contributed by not normally exceed 20% of the companys registered capital, but the high-tech achievements into the capital can reach 35% of the national special regulations. advantages and disadvantages of direct investment: Benefits: conducive to the formation of producti
13、on scale as soon as possible, enhance their strength. in favor of access to advanced equipment and advanced technology, improve production levels. absorbing direct investment is good or bad based on business conditions, return to investors, less financial risk. Disadvantages: higher cost of capital,
14、 especially business conditions better and more profitable, the remuneration paid to investors is based on how much the amount of their capital contribution and corporate profit to be calculated. easily dispersed corporate control. Using absorbing direct investment, investors are generally required
15、to obtain the number of investment management rights to adapt, if a certain proportion, you can have complete control over the enterprise. In the absence of securities for the media, property rights were not always clear, not easy to property transactions. (B) the issuance of common shares definitio
16、n: ordinary shares are issued in accordance with the law, Ltd. has administrative rights, the stock dividend is not fixed, it refers to the enjoyment of the rights of ordinary shares in the management and distribution of the companys operating profit and property, on behalf of meet claims on corporate earnings and the remaining proceeds after property rights and claims of all creditors and preferred shareholders solvency require
