Empirical Study On The Influence Of Differentiated Capital Cost On Enterprise Investment Scale

Investment activity is an important basis for the enterprise survival and develop ment,is an important source for the enterprise profit and optimization.The effect o f investment determines whether the enterprise can long-term develop in the increasi ngly competitive market,this indicates that in many enterprises decision-making,inv estment decision-making is the most important and the core problem of enterprise.Scientific and reasonable investment decisions include three aspects: investment strat egy,investment timing and investment scale.In the practical research,scholars pay more attention to the choice of investment strategy and investment timing,but the f ocus on the investment scale is relatively weak.When the enterprise is faced with many investment projects,how to make a choice is the most favorable decision for the enterprise? One of the most basic,the most direct principle is compare invest ment returns with the cost of capital size,reasonable and effective investment decis ions reflected in the investment return rate is not lower than the cost of capital,w hich makes the cost of capital has become the investment decision of the enterprise s selected benchmark and consideration,it can be said that the investment decision based on the cost of capital can guarantee its scientific nature and rationality.In re cent years,most domestic and foreign scholars study the investment decisions of en terprises from the perspective of free cash flow and financing constrai nts,but discu ss the less capital cost perspective,even the research on the influence of capital co st on the scale of investment is less.Based on this situation,this paper systematica lly studies the relationship between the capital cost of listed companies and the inv estment scale of enterprises,and puts forward some reasonable suggestions to optim ize the investment scale.The main contents of this paper are as follows: the background and problems,the theory and literature review,the theoretical analysis and empirical test of the re lationship between the capital cost and the scale of investment.Based on the research results of the previous scholars,this paper briefly introduces the research backgr ound,puts forward the related issues,the significance,content and ideas,as well as innovation.Secondly,this paper combs and analyzes the related theories and the d omestic and foreign literatures about the influence of the capital cost on the invest ment scale in the enterprise investment decision and invest ment decision,which pro vides the theoretical support for the further research.Then,considering the main wa y to form or financing the cost of capital,mainly form the cost of debt capital,th e cost of equity capital and the weighted average cost of capital these three aspects to explore the theoretical mechanism of the impact of enterprise investment scale,and put forward the research hypothesis.Thirdly,by using the financial data of List ed Companies in China,the rationality of the hypothesis is verified by empirical an alysis.Finally,this paper summarizes the main conclusions of the study,based on t he conclusions of the paper on the issues involved in policy recommendations,and the limitations of this paper and future research prospects.Through theoretical analysis and empirical scientific test,this paper draws the f ollowing significant conclusions:(1)There is a negative correlation between the cost of debt capital and enterprise investment expenditure,that the cost of debt capital is higher,the enterprise investment spending less,the investment scale is smaller(2)There is a significant negative correlation between the cost of equity capital and th e enterprise investment expenditure.The cost of equity capital plays a certain role i n restricting the scale of investment.(3)There is a significant negative correlation between the weighted average cost of capital and investment scale,the weighted av erage cost of capital on the scale of investment in the enterprise is more binding t han the cost of debt capital or equity capital cost of the single binding,there is an obvious linear function relationship between.The conclusion is different from the previous scholars' conclusions about the relationship between the capital cost and th e investment scale of the enterprise,which is the inverse U type.For this reason,t he article also gives a more convincing argument.