Growth Opportunities, Financing Flexibility And The Company's Capital Structure Relationship Study

This dissertation stating from the research of the composition and measurement of enterprise value, through the analysis enterprise value in growth opportunity and the financial flexibility from financing, empirical analysis of China's listed companies growth opportunities and capital structure, and using option price technology to make the financial flexibility conceptualization, model-based, and determines its value. On the basis of the expanded enterprise value, put forward the expanded of trade theory. And finally using the expanded trade theory to explain the financing behaviors of China's listed companies.The major flaw of modern capital structure theory is that it cannot explain very well many enterprises remain low debt levels when tax benefits is large and bankruptcy costs is small.This kind of phenomenon deviated the basic perspective of the modern capital structure theory. Under the meaning of traditional enterprise value, deviated the optimal capital structure of enterprises value maximization. This dissertation carried on the thorough analysis to this phenomenon from the financial flexibility, and proposed the expanded enterprise value theory, showed enterprise's goal should be the expanded enterprise value maximization. Thus given a good reason to explain the enterprise's equity financing preferences well.This dissertation given a introduce of the measurement of expected cash flow based enterprise value first, and demonstrated essential uniformity of DCF method and EVA method emphatically.Then has carried on the theory and empirical analysis of the relationship of growth opportunities and capital structure, proved the growth opportunity and enterprise's debt ratio highly negative related, enterprise who with higher growth opportunities, have the more inclined to maintain low debt level. On this basis, the dissertation introduced the financial flexibility, and use options pricing theory to price it. Then merges the financial flexibility value to traditional enterprise valuation, expand the meaning of enterprise value and amended the traditional capital structure theory. In uncertain conditions, the financial flexibility value that obtains from equity financing can compensate for the increased capital cost from deviate the optimal capital structure. Finally, through analyze financing environment of our listed companies and resulting financing behavior, the dissertation explained the maintain of financial flexibility is a important reason for company's equity financing preference, from a renewed perspective on the phenomenon of many enterprises' low debt.