An Empirical Study Of The Relationship Between The Capital Structure And Enterprise Value Of Listed Real Estate Companies

The study on the relationship between capital structure and enterprise value has been paid more attention by most scholars at home and abroad, capital structure itself is a kind of important research based on theoretical and practical value. Whether the capital structure is rational depends on the allocation of control power in the company by stockholders, creditors, manager and so on. Due to the different economic system and capital market integrity in every country, a study of the relationship between capital structure and enterprise value is of great importance based on the special economic background in our country. At present, a new departure to real estate enterprises has been issued constantly by the government of China, real estate enterprises also attracted wide attention from all quarters of society, about China's real estate enterprise capital structure and the enterprise value of the research has more realistic significance.The relevant theories of capital structure and enterprise value were summarized in this paper, and then real estate industry in China was analyzed. The research methods of capital structure and enterprise value are more diversity, also measure gauges are varied. Its research conclusions are basically divided into four, positive correlation, negative correlation, irrelevant and relevant within limits. Different time, different industries, different ways and different index can form different empirical results. The verdict about the relation between capital structure and enterprise value haven't been unified, only can say that different conclusions in different situation, different conclusions adapting to different industries.The real estate listed companies in Shanghai and Shenzhen are taken as research object in this study, the study on the correlativity to capital structure and enterprise value by using 7 year's data from 2004 to 2010 of 109 companies. Enterprise value adopt seven indicators including the solvency and profitability, shareholders profitability, operation ability, risk level, cash flow capacity and development capability, principal component analysis and data standardization are used to obtain integrated index from the seven indicators. It not only reflects the value of enterprises comprehensively but also is one of the innovation points in this paper by using the comprehensive indicators to measure the value of enterprises. Through the descriptive statistics, the correlation analysis and regression analysis, it is concluded that the capital structure and the enterprise value has positive correlation, but only the asset liability ratio can be controlled within the scope of 80%, this positive correlation can be tenable, once surpass 80%, the enterprise value would drop dramatically and the conclusion provides guiding direction for Chinese real estate of corporate finance.Finally, combined with the empirical analysis results, suggestions are offered to solve the problems about how to improve the value of Chinese real estate, including: integrating enterprise comprehensive performance to optimize capital structure, optimize the financing environment of real estate industry and offer a variety of financing channels, to strengthen the market oversight mechanisms, speeding up the reform of monetary system.