Capital Structure Of Listed Companies In China To Study

The problem of capital structure is an important one in the enterprise's financial decisions. It is not only closely supervised by the managers, but also observed by the investors. Which factors will have impact on capital structure? What's the dynamic pattern of the capital structure? Is there any relationship between capital structure and the firm value? If the answer is yes, then what are they? And what are the conditions of this relationship? These problems have been puzzling the theorists and practitioners even in the developed market economy countries. The research results are greatly enriched in this area as people try to use all kinds of theories to explain the practice of the capital structure.As the pioneer of the reform of the institute of enterprises, China's listed companies are the first to be tested by the market. The decisional management behaviors of the listed companies have attracted great attention. The research of the enterprise's behavior is not only important to the management of the listed companies, but also important to the healthy development of the whole market and the realization of the market functions through the improvement of the market efficiency. Through the study of this book which targeting on the listed companies' capital structure, we can not only find out the characteristics of the changes of the listed companies, but also have a comprehensive understanding of the bases of the capital structure determination, as well as the factors that have impact on capital structure decision. All of them will be the reliable basis of the proper design of the enterprise institutions. The research in this book is carried out around the following three problems:1. The analysis of the patterns of the capital structure changes and the impact factors;2. The relationship between the capital structure and the firm value;3. Capital structure and firm governance.The discussion of the above problems is distributed hi the following seven chaptersrespectively:Chapter 1 discusses the concept of capital structure, its contents and the researchesinner and outside of the country. The choice of the research topic, the rout and themethods of the research, and the contents of the research were also discussed. Chapter 2 reveals the characteristics of the capital structure of the listed companies . The research is carried out hi two levels. The first is the research taking all the companies listed in Shenzhen and Shanghai Stock Market as the sample. The second is industrial analysis. The patterns of capital structure changes from 1995 to 1999 in the above two levels are revealed. These changes are compared with that of the American enterprises and the features of the capital structure of the enterprises of developing countries.In the second part of this chapter, the impact of the profitability of the company, the scale, the ratio of the tangible assets to the total assets, the ratio of the state-owned shares and corporation shares, and the ratio of ordinary shares on capital structure are analyzed using regression method, and the results are properly explained. Chapter 3 discusses the determination of capital costs. The costs of capital directly influence the choice of the capital structure. The existing empirical studies on the capital costs of the listed companies in China have contradictory results. Therefore in this research, the stress is put on the discussion of the methods to determine equity costs and total costs of the capital. The Capital Asset Pricing Model (CAPM) is chosen to calculate the equity cost of the listed companies after a comprehensive discussion, and an empirical study is carried out taking "synthetics "industry as the example. The results show that equity cost is bigger than debt cost. Since the equity cost is bigger than the debt cost, then why almost all the listed companies in our country have the preference to equity finance? To solve this problem, a further discussion is carried out, and this phenomenon is properly explained. Chapter 4 deal...