An Empirical Research On The Relationship Between Capital Structure And Corporation Performance Of Listed Companies In China And A Suggestion On Optimizieng Capital Structure

Capital structure is a key issue in corporate finance. An optimalcapital structure can help enhance corporation performance. Decisionsregarding capital structure include the level of equity and debt, the levelof long-term debt and so on.There are seven parts in this paper. The first part is a briefintroduction of the background of this paper. The second part isliterature review. An analysis of the sample data is done in the third part.The fourth part use a principal component regression to show therelationship between capital structure and corporation performance.Thefifth part discusses the optimal capital structure among23industries andanalyze five of them, including factors that influence the capital structurelevel. The sixth part suggests that corporate bond is a more stablesource of debt financing. Last part is conclusion.