This study explores the impact of significant investors' control and institutional shareholders' participation on the cost of equity in Chinese high-tech firms. Using panel data from 2012 to 2022, it analyzes the relationship between equity ownership and cost of equity, controlling for factors like firm size, financial leverage, and growth potential. Findings reveal that dominant shareholders' control positively correlates with equity prices, potentially due to self-serving behaviors that increase firm valuation and equity costs. In contrast, institutional investors' stakes inversely relate to equity costs, suggesting their oversight reduces valuations and costs, enhancing management. The study's limitation is the lack of differentiation among institutional investors, which could affect equity costs differently. Several strategic recommendations emerge for effective corporate governance and financial management. For policymakers, the study suggests the need for regulations that promote transparency and fairness in shareholder rights, as well as the establishment of frameworks that facilitate the active participation of institutional investors in corporate governance. By implementing these strategies, high-tech firms can not only manage their equity costs more effectively but also strengthen their financial health and competitiveness in the global market.
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