The Research Of Capital Structure

Capital structure is the rate of long term liabilities and sovereignty capital. Different capital structure has a big effect to firm finance adventure, surplus of every stock, firm value. So,every firm should make much of firm capital structure .When the rate of property fee before tax is greater than firm liability interest rate.Improving liability rate can add firm surplus of every stock for the action of finance level. When the rate of property fee before tax is less than firm liability interest rate. Improving liability rate can reduce firm surplus of every stock for the action of finance level.In the condition of perfect capital market,firm s average net cost is a definite quanity.Namely, power and profit net cost of no liability firm .It is no relation to capital structure.But power and profit net cost of liability firm shareholder is added with liability rate improved.So firm value is no relation to capital structure; firm value depends only on firm's future surplus.The more future surplus is,the more firm'value is; the less future surplus is, the less firm's value is.In the condition of perfect capital of firm's income tax,future cash flow rate of entering firm will increase for exist of interest tax shield .So liability can increase firm's value and increase firm's value brow (value brow is multiply of tax rate and liability brow) .If liability inprove, value increment will increase with it.In the condition of perfect market of firm income tax and individual income tax. when (1- T2)(1-T2) > (1- Tl)(1-T3),liability could inprove firm value ;when (1-T2)(1-T2)< (1-T1)(1-T3),it can not inprove firm value but reduce it.Under the favorable condition, liability can redound firm value .when liability blow excess a definite blow ,it will reduce the increment for the exist of net lost of expectant bankrupt and net lost of agency , which will reduce firm value, obstacle the rise of firm liability rate and keep firm liability in the definite range.We must think of three factors to make a best capital structure .First factor is margin tax shield, namely, the ratio of firm value's increment for liability and the increment of liability blow. Second factor is finance crisis net lost that is bought in future .Thirdly.we must make much of the market action and adjust capital structure.