Research On The Effect Of Debt Financing In Electric Power Listed Company

According to the capital structure theory, reasonable debt financing can effectively increase the company value. This paper begins with a look at the classical theory of capital structure. On the basis of theoretical analysis, the effect of debt financing lies in financial leverage effect, the tax shield effect and the company governance effects. Then considered the characteristics of the power industry, through the statistical analysis of 51 electric power listed company, we find that the power industry has obvious features, such as debt financing preferences, the proportion of long-term debt and so on, and make s detailed study on the electric power listed company's effect of debt financing, then use empirical method to prove them. The empirical results show that, for the company with good profitability, increasing asset-liability ratio, its debt effect of financing can be improved; for the company with bad profitability, increasing asset-liability ratio, debt effect of financing will be worse. The paper ends up with suggestions for improving effect of financing.