The Research About How To Measure Capital Costs Of Our Country

The cost of capital is the basis for the financing decision, investment decision, dividend policy ,capital structure and the estimated value of enterprises. The accurate measurement of the cost of capital has become increasingly important for the enterprise decision. Previously used in the corporate debt instead of the cost of capital rate method has been unable to meet the needs of enterprise decision. So we need to identify a suitable method of calculating the cost of capital.At first, based on the cost of capital measurement methods in the western countries, establish the results of research on several of the cost of equity capital. Then, with the reality of our country, the method of bond yields increase the equity premium is denied. Arbitrage Pricing Theory method of calculation is also denied for the operability. Capital asset pricing method is not suitable for our country. With the development of market economy and people's investment theoretical progress, capital assets in the application need to be further confirmed in our country. Therefore the paper test the applicability of Capital Asset Pricing Model through the empirical study. Because of the results showed that this method was still not inappropriate, the paper focused on the reasons for this result .We have an conclusion that the root leading to capital assets model being not applicable root was China's enterprises shareholding structure particularity and enterprise capital costs can not be divorced from the correct measures in this particularity. Because several models can not be used, we hoped to try the dividend discount model and the method of the average yield of stocks. Two methods calculated the corporate capital cost from the perspective of the dividend returns. Logically they directly reflect dequity investors on the expected return equity investment requirements. Especially in our special shareholding structure, the two calculation methods were more suitable for Chinese enterprises than other method. At last, under different ownership structure of corporate governance mode, the paper analysis the size of return pressure and select equity capital cost calculation method .The paper focus of the Capital Asset Pricing Model in China's plicability ,using the theoretical and empirical analysis of the method of combining ,and determine the ultimate solution about the Calculation of equity capital costs through the synthesize and summarize.