The Correlative Research Of Capital Structure And Corporate Value

The capital structure theories are the core of the modern company finance theories. Along with the development of economy and the perfection of capital market, economists constantly infuse vitality to the capital structure. From 1958 in which Modigliani and Miller put forward MM theory, the researcher continually lead the model into realistic word and introduce the agency cost theory, priority funding theory, the trade-off theory, the control theory etc. These theories almost consider that the capital structure relates to the enterprise value.The domestic capital structure research can be divided into three aspects: The research of the capital structure theories; the analysis of the capital structure influence factor; the study of the capital structure and enterprise value. This thesis study from the relation of the capital structure and the enterprise value .Studying the relation of the capital structure and the enterprise value, the foreign scholar general selects the stock price to measures the enterprise value, while the local scholar selects accounting indicators to measure the enterprise value .Because of choosing different value indicators, the local scholar doesn't get the same conclusion about the relation of the capital structure and the enterprise value. But this thesis selects economic added value to measure the enterprise value.The paper first recalls the development process of the capital structure theory, and compare different value criteria and establish a model of economic value added, then collect china's listed enterprise data and establish a model of the relationship of the capital structure and the enterprise value in which the unit economic value added is as value indicator and long-term liability is as capital structure one. In the end we get conclusion that the capital structure positively relates to enterprise value through empirical analysis. Through the research, the author finds that our enterprise' ability to create value is weak, the enterprise' long-term debt ration is low, and the enterprise manager is inclined to equity financing. Therefore, at this situation, China should actively develop the bond market, increase the ration of debt financing and improve the listed companies in China's capital structure.