Research On Capital Structure And Financing Decision-making Of Listed Companies In China

The modern capital structure theory is the core theory for enterprises to make plan and implement decision of financing. It is also the hot topic which the financial circle has continuously studied. A certain capital structure is the result of the financing decision, that is, the capital structure is a static concept while the financing decision-making, which forms the capital structure, is a dynamic concept. The research on capital structure has not stopped since 1958 when Modigliani and Miller put forward the MM theory. Taking a panoramic view of domestic and foreign research on capital structure, the academic studies are broadly divided into three directions: First, the research on the economic effects of capital structure; Second, the research on the influence factors of capital structure; Third, the research on the effects of the capital structure on management.With China's rapid development of economy,many enterprises urgently need financing to expand. However, when facing financing choices, the enterprises don't know how to make an appropriate financing decision, what the standard of making financing decision is and why they should make this decision. By summarizing predecessor's theories, this paper is trying to answer these questions. That is why this paper makes research on the relationship between capital structure and financing decisionIn first chapter, we briefly introduce the research content, research mentality, research significance and research method. In second chapter, we systematically review the development process of foreign capital structure theory. The foreign capital structure theory's evolution course may roughly divide into three stages: Early capital structure theory stage, classical capital structure theory stage (MM theory) and modern capital structure theory stage.In third chapter, we make an empirical analysis of determinants of listed companies'capital structure. Base on the analyses, this paper finds that company factors such as size, mortgage assets, tax and return of assets have significant effect on the capital structure of listed companies, especially real estate companies.In fourth chapter, by analyzing the financing decisions made by the company WANKE from 1997 to 2004, this paper further reveals the factors that companies should concern, and the way to optimize the capital structure to enhance the value of companies.In fifth chapter, according to the theory and empirical analyses, this paper puts forward several policy proposals for optimizing capital structure of Chinese listed companies.Overall, many problems about capital structure and making financing decisions are not solved in this paper, and it would be the next project we need to research further.