China Real Estate Capital Structure Factor Analysis

The research on capital structure in the west has become one of the most critical issues of corporate finance since the MM theorem had been known in 1958. Capital structure is not only related to investing and financing decisions, but also plays great roles in corporate performance, corporate value, corporate government and corporate strategy.Since 1970s, many famous academics did a lot of research about the factors which affect capital structure releasing the strict hypothesis of the MM theorem. It was proved that the capital structure had a direct bearing on the classification of the industries.In recent years, real estate industry has developed with a rapid growth and been becoming a pillar industry of national economy. It influences development of the socio-economy and other relevant industries.This essay intends to study the capital structure of real estate companies of China, analyze the factors that determine the capital structure and ascertain the influence degree.The paper introduces backgrounds and goes through the classic capital structure theories. Then, expatiate on the capital structure and the financing channels of the real estate companies from the perspective of capital chain and cash flow. After that, summarize the macroscopic and microscopic factors which affect the real estate companies and apply multi-factor linear regression. Finally, according to the theory and the empirical analyses, this paper puts forward several advices for optimizing the capital structure of real estate companies.