Influences of Cost of Capital on Financing Preference of Chinese Listed Companies

opposite to the financing preference of creditor's rights in western firms, Chinese listed companies obviously have the financing preference of shareholding. This essay uses the theory of property for reference, and redefines the concept Cost of Capital in a higher level and consider the cost of capital as the property of investors. Though a mathematics model I analyze that how restriction of cost of capital's property right makes influence on the financing preference of firms. And consider that it is the restriction of cost of capital's property right or the imperfect cost of capital' property right that influence the financing cost of shareholding and creditor's right hence, determine the financing preference of listed companies. In other words, it is the restriction of cost of capital's property right that cause the financing preference of creditor's rights in western firms, and the imperfect cost of capital's property right is the reason for the financing preference of shareholding of Chinese listed companies.