Shanxi Coal Listed Companies’ Capital Structure And Corporate Value Relevance Of Research

Coal is the main energy of economic and social production in China. The development of coalindustry has boosted China’s rising economy. Recent years witnessed a decline in coal demand dueto slow economy growth, declining demand in electricity utilization and industrial restructuring. Atthe same time, the emerging energy (such as shale gas), the price slump of international coal, andimported coal dumped into domestic market all made an adequate supply of domestic coal market.Because of these factors, the booming coal industry had a turning point in2012. The price ofinternational coal slumped and the all the listed companies of the whole industry faced manydifficulties. Shanxi，a province known as coal, has been strongly impacted in the area of listed coalcompanies who can perform its social responsibility better only by increasing enterprise value.Confronted with the fierce competition and complex business environment, how to increaseenterprise value to enhance its anti-risk capacity and competitiveness is the main task facing us.One efficient way is to optimize the capital structure. As the focus of the capital structure of thefinancial decisions of corporate management, to enhance corporate value and improve corporategovernance plays an important role. By optimizing the capital structure is to enhance corporatevalue has always been concerned about the domestic and foreign scholars.Therefore, the authorselects this subject, and intends to find out the strategies of increasing enterprise value of listed coalcompanies in Shanxi Province by optimizing capital structure and decreasing capital cost andimproving corporation governance, on the basis of analyzing the relationship between capitalstructure and enterprise value.This article takes listed coal companies in Shanxi Province as the research object. it gives anexplanation of a theory between capital structure and enterprise value. Then, after analyzing thecurrent situation of capital structure of listed coal companies, it conducts an empirical analysisbased on its data from2003to2012. Enterprise value has been weighed from solvency, profitability,development ability and operation ability; figure out its comprehensive score metric throughenterprise value factor analysis; select asset-liability ratio, short-term liability ratio and shareproportion of the largest shareholder to represent capital structure, and verify the relationship between capital structure and enterprise value through regression analysis. Finally, according to theempirical findings of capital structure and enterprise value, it proposes some strategies of increasingenterprise value by optimizing capital structure.