Behavioral Corporate Finance Theory And Financial Decision-making Of China's Listed Companies

MM theory, which is built on a series of strict hypothesizes, thinks that the capital structure and dividend policy of the company do not affect the value of the company. After the birth of MM theory, many scholars try to develop MM theory by loosing its strict hypothesizes. Through the development of nearly a half century, all hypothesizes of MM theory have been loosened, except the hypothesis of rationality of investors and managers. But in real world, investors and managers are not always rational. Traditional theories of corporate finance can not explain many"strange phenomenon"of financial market. Therefore, behavioral corporate finance is created. Behavioral corporate finance can give much better explanation to those"strange phenomenon"from the angle of psychology and sociology. But the present theories of behavioral corporate finance mainly focus on the research of investors'behavior and the research of managers'behavior is not enough. In fact, like the investors, the managers will also be affected by the emotion and feeling so as to behave irrationally.Therefore, this article tries to find out the impact on the corporate'financial policies imposed by both investors'irrationality and managers'irrationality in order to solve the following problems. First, do the irrational investors affect the financial policies of the company and how do the managers react to the irrational investors? Second, do the irrational managers affect the financial policies of the company and how do the investors react to the irrational managers?This article is divided into three parts, including seven chapters. The first part, which includes the first chapter, defines the behavioral corporate finance and introduces some relevant psychological knowledge about the behavioral corporate finance. The second part, which includes...