The Research Of Wanbao Enamelled Business' Capital Structure

Since 1958,Modigliani and Miller first proposed Modigliani-Miller Theorem on capital structure, the foundation of modern capital structure theory; occidental economists have done a lot of research on the issue of capital structure. Based on the mature capital structure theories and the advanced econometric method, this paper tries to study the optimization of capital structure in the capital flow.This study firstly reviewed the development of capital structure theory. Then, it presents the problem analysis of current capital operation in enamelled wire industry with a detailed study of the market demand financial situation as well as the condition of business in Wanbao enamelled wire business. Moreover, on the basis of linear programming model, the paper suggests the linear project model of capital structural optimization of Wanbao enamelled wire to get the best capital structure coverage. Finally, the paper discusses the strategic methods and projects of capital structural optimization of Wanbao enamelled wire business.After the complete, systematic and profound analysis, the dissertation draws following conclusions.Firstly, there are several problems existing in present capital structure of Wanbao enamelled wire, such as the high asset-liability ratio, unreasonable liability structure and high proportion of current liability and so on. Through expanding the proportion of liability financing, the capital structure of Wanbao enamelled wire can be optimizated.Secondly, the optimization of capital structure of Wanbao enamelled wire is concerned not only with the financial decision-making of how to adjust the shareholders' interest and the liability structure and its proportion, but also with the harmonization of macro-interests which are closely related with present macro-economic institution, market environment and system. It is necessary to combine the optimization of companies' financial decision-making behavior with that of the external environment and system in order to obtain the optimization of capital structure of Wanbao enamelled wire.