Journal of Shanghai Jiaotong University

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Study on the Cost of Financing Securities Based on Asymmetric Information

ZHOU Rencai1,2   

  1. (1.Antai College of Economics and Management, Shanghai Jiaotong University, Shanghai 200052,China;2.Orient Securities Co. Ltd., Shanghai 200010, China)
  • Received:2009-04-12 Revised:1900-01-01 Online:2010-03-30 Published:2010-03-30

Abstract: The security company should consider the loss on investment opportunity and capital structure adjusting during financing securities. Using information asymmetry, this article constructs a game model between security company and investors, and quantitatively analyses the opportunity cost. Furthermore, through analyzing the investment portfolio risk exposure caused by financing securities and the condition about the security company’s engaging in financing securities, the article concludes that the unconditional contract gives more utility for the security company.

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