Equity And Debt Financing Impact Study On Corporate Investment Decision-making Behavior

A country’s economic growth, the investment will play a very important role, but business is investment decision makers and implementers concrete, therefore, essential to our investments. Mental accounts believes that financing may lead to increased value of the company managers to abandon investment projects and reduce the value of the company’s acceptance of the project, therefore, would not affect the financing channels for enterprises to invest in the decision-making also needs further study, in this study, to the separation principle (Separation Principle), and death cost method (Relevant Costing), mental accounting (Mental Accounting), based on research by a number of experimental methods to study the impact of debt financing to make capital investment decisions of managers, which found costs and unequal income prompted managers deviated from the efficient economic decisions, investment managers and asset disposals carried out in order to avoid simply can not solve the losses caused by the assets, the higher the amount of outstanding debt, the higher the investor’s reliance on assets. Is independent of the principle of leverage capital structure, that is, a perfect capital market with an enterprise value is not affected by the corporate finance; reduce the ratio of indirect financing, and gradually increase the proportion of direct financing, decreased:according to the study made a number of policy recommendations over-reliance on bank borrowings; Reinforce the important role of investment banks in optimizing business structure.