Stock Mispricing,Financial Constraints And Dynamic Adjustment Of Capital Structure

Dynamic capital structure theory shows that each enterprise has an ideal capital structure.When reach the optimal state,the enterprise can realize the maximization of its value.But owing to the optimal structure will be influenced by a variety of internal and external factors,the change of factors will directly cause fluctuations in the optimal capital structure so that the firm's actual capital structure tends to deviate from the optimal state.However,enterprises need to pay different degrees of adjustment costs when they take measures to adjust the capital structure.Therefore,when different characteristics of companies face the internal and external factors,the optimal capital structure of the deviation rate and return rate is different.First of all,based on the review of dynamic capital structure theory and related literature,this paper finds that when the enterprise's internal characteristics,external macroeconomic environment and capital market conditions change,they will cause the change of the optimal capital structure.In this process,most companies will take corresponding measures to adjust the actual capital structure.But less involved in capital market angle in the current literature as a breakthrough point to study the optimal structure state changes.As an important reference for listed companies in the external market,the impact of the stock price performance on corporate capital structure adjustment decision-making is significant,and will indirectly affect the business performance and the efficiency of capital allocation.Based on this,the article which research on the relationship between stock mispricing and the optimal capital structure adjustment of different characteristics of listed companies has the vital significance.According to the actual situation of Chinese enterprises,this paper chooses the appropriate variable to enterprise fitting for the optimal capital structure.On this basis,through the introduction of stock mispricing,financing constraints,building a dynamic adjustment model of capital structure.This article uses the unbalanced panel data of 2005-2015 of 328 small and medium-sized boards of listed companies in China.According to financing constraints proxy index size,the enterprise can be divided into high financing constraint group and low financing constraints,to discuss the capital structure adjustment of different characteristics of enterprise in the face of the stock mispricing.The empirical results show that stock mispricing is positively related to the change of target capital structure,with the adjusting speed of the enterprise is positively correlated relationship;When stock mispricing degree is higher,the greater the company's optimal capital structure deviation degree is,and the faster the enterprise's adjusting speed is.Financing constraints and the adjusting speed to the optimal state have a negative correlation relationship.The higher the company's own level of financing constraints,the capital structure adjustment speed is slower.Grouping of financing constraints can be found that,compared with high company financing constraints,low one facing the stock market mispricing phenomenon has a faster adjustment speed to the target capital structure.In this paper,the research enriches the theory of dynamic capital structure to a certain extent,especially in combination with the stock mispricing,financing constraints.It is beneficial to the company managers to train their consciousness of the optimal capital structure adjustment.In the face of the stock overvalued or undervalued,they could take appropriate optimization scheme based on combining its own characteristics,to reduce cost and financial risk,and increase the value of the company ultimately.At the same time,the article also provides investors and regulators with a judge reference of enterprise's financial risk conditions.