The Modern Theory Of Capital Structure And Corporate Governance Efficiency Study

In 1958 , two economist Modigliani and Miller proposed famous MM theory .They argued that capital structure has no effect on enterprise value in the completely competitive capital market Later on , many papers about enterprise finance have analyzed capital structure in terms of tax capital cost agency cost and incomplete contract Because completely competitive market does not exist in reality, capital structure has particular function on interior message stimulation mechanism and control righto This article just discusses these aspects, that is, studies governance structure reform in terms of capital theory. Chapter 1 has outlined simply incentive base-models signaling models and control base-models at first. Then, it has illuminated financial value in terms of financial essence, financial object and financial function .Last ,it has explained the importance of capital market construction. Chapter 2 has analyzed capital structure and governance structure situation in state-owned enterprise at present firstly, then it has drawn conclusion about capital structure and governance structure in state-owned enterprise. Chapter 3 has discussed the influence and role that capital theory has on enterprise governance efficiency in terms of incentive mechanism, constraint mechanism and control right arrangement Chapter 4 has introduced that "debt-to-equity" is the choice of adjusting capital structure and governance structure according to the revelation of capital structure theory to "debt-to-equity".