Research On The Capital Structure Of WK Company

As to now, the real-estate industry has a pivotal position in our country which in social market economy environment, it already has 40 years development history and became an irreplaceable industry to support our country’s development. As we all know, our country’s development has closely related to the development of the real-estate industry. And the financing problem has become the most important problem in the process of the development of real-estate enterprises. Different sources of funding also related to the capital of enterprises. Capital structure is an important indicator of the level of business development, and therefore the capital structure of real-estate is particularly important, and the estate industry’s single financing channels and high debt levels fact have not been enough attention to the business. Until the beginning of the financial crisis in 2008,because of the deterioration of the external environment, the real-estate industry has led to financial risk gradually broke out, the real-estate industry’s capital structure before they get the attention they deserve. WK as one of first publicly traded companies in china, it is currently the largest real-estate company in china, so that the research on WK company’s Optimal Capital Structure will help the real-estate industry to choose a reasonable capital. Therefore, this article choose the WK company’s capital structure to study can help to lay the foundation of the development of the real-estate industry’s capital structure.This paper is divided into five parts. The first part, the author explain the background and significance of this topic, describes the theoretical concepts and models weigh capital structure. The second part, in reference to the basis of domestic and international research literature. The third part,the author analyzes the situation of WK capital structure and its structure formation process, and then found that the presence of WK debt ratio is too high. The forth part, the author has taken the optimal capital structure equation to calculate WK company’s static optimal capital structure, the calculated results show that WK company’s static optimal capital structure is 71%. However, due to the capital structure influenced by external market environment, corporate optimal capital structure will not stay in a static value, but should be an interval. On the basis of the reference to the foreign mature real-estate companies on determining the optimal capital structure interval of WK is 60%-70%, and fluctuates around 65%. The last part getting the optimal capital structure interval of WK Company, on the basis of this providing advices on WK company capital structure optimization. WK in the capital structure optimization process should focus on accelerate the capital liquidity, and broaden its financing channels, changes mainly rely on bank loans bondage, and to improve their financing ratio, reduce the debt ratio. Finally, this research concludes show WK company capital structure optimization in practice the role of theoretical guidance, can provide the basis for optimizing the capital structure of our country’s real-estate industry by analyzing this article.