![](bg5.png)
observe that
2
R McF
is increasing in the number of
variables, reaching its peak of 0.160, which supports
that every control variable has incremental
explanatory power over corporate financing
decision.
5 CONCLUSIONS
We present a model to investigate the relation
between corporate financing decision and the
heterogeneity of beliefs between the investors and
the manager. The model generates a new prediction
and we test it. Firstly, different values of the initial
shareholder and investors under the issues of equity,
debt and no financing are analyzed. Secondly, the
conditions on the issue of equity, debt and no
financing are confirmed respectively. Thirdly, the
prediction is presented based on the above two
conclusions. In the end, we empirically analyze the
impact of heterogeneity beliefs on security issuance
decision using a sample of issues from Chinese
financial market, and we find that heterogeneity
beliefs have explanatory power to security issuance
decision.
ACKNOWLEDGEMENTS
The authors thank National Natural Science
Foundation of China (Project No. 70821061).
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