Considering information asymmetry between inside and outside of the firms,this paper discusses the financing strategy of M&A,and builds a model.According to the model,we can see that the firm with relatively expected low-productivity will choose equity financing for M&A,and the firm with relatively expected high-productivity will choose debt financing for M&A,and the firm with expected medium-productivity will not choose financing from outside.In the case of undeveloped capital market and financing tools in China,the conclusion of the model has some extent significance for helping firms to choose financing strategy for M&A rationally.
