Capital Structure - Concurrently On The Company's Capital Structure Optimization Ideas

Capital structure is not only an important theoretical problem but also a significant practical issue. As a theoretical problem it needs to be resolved two basic questions, one is if the firm has the most proper capital structure, the others is what kind of capital structure is the best. Being a practical issue, at present is to deal with the excessive rate of assets and liabilities and the unreasonable structure of stockholder's right in China. By explicating the development of the capital structure theory, this thesis says that the enterprise has only one suitable capital structure for which must fit the maximum enterprise's value. As a interior variable, capital structure is effect on enterprise's value by two basic financial management scope: venture and profit. The unreasonable capital structure led to the sharply rising of interest burden in Chinese firms and the incomplete corporate governance structure or the unreasonable stockholder's right structure. This thesis pointed out the following basics ways to resolve the problem of Chinese firm's capital structure: First is finance restructure; Second is adjustment for existing volume and increment of capital structure; Third is state-owned shares reducing plan. By evaluating the value of transference debt into shares which is being put into practice, this thesis also draw a conclusion that transference debt into shares can not change the quality of the firm's assets and the profitability of enterprise. But transference debt into shares can provide the relative easy circumstances operating environment. Therefore, the transference debt into shares can slow but can not attempt, and it can not deal with the problem of over-loaded rate of assets and liabilities. The effect of transference debt into shares can not be overestimated.