Corporate Value, Capital Structure And Corporate Governance

Since the birth of MM theorem, the economic circles have been paying intensive attention to the theories of capital structure in enterprises. Debt is a double-edged sword, and its role is often misunderstood. Some firms are far too conservative in their use of debt, and others are in the opposite direction, becoming much too heavily indebted, with bankruptcy as the unfortunate consequence. Striking the right balance is what the capital structure issue is all about.Corporate governance and the reformations in state-owned enterprises have been the hotspots in academic and enterprise circles these years. Beginning with the review of the theories of capital structure in all periods, this paper studies the capital structure in Chinese enterprises on the whole as well as just on listed companies and analyzes the causes of some problems in it respectively. Then, it probes into the influence of the capital structure on the value of listed companies. With the theory of property right economics, this paper attempts to reveal the process of capital structure formalization and makes it the base of studying the relationship between the capital structure and the corporate governance. Meanwhile, it applies some related capital structure theories to the situation of corporate governance in Chinese listed companies to propose some suggestions and countermeasures. Also, this paper makes a theoretical and empirical explanation of influential factors that affect the capital structures in Chinese listed companies. In the end, with the result of the studies, it puts forward the general framework of analyzing and designing the corporate capital structure.Appendix 1 is the empirical study about the relationship between the scale of enterprise and the capital structure.Appendix 2 is the case study on the listed company Qilu Petro-chemical(600002) which intends to demonstrate the arguments in this paper.