Empirical Study On The Relationship Between Capital Structure And Corporation Value Of Listed Electric Power Companies

Since Modigliani and Miller put forward the famous MM theorem in their academic papers in 1958,people gradually get a deep understanding of the essence of the capital structure.Thereafter,the theory of capital structure problem has always been the hot spot of the academic research.One of the important research directions is to analyze the relationship between capital structure and enterprise value in order to determine the optimal capital structure and promote the enterprise value,maximize the interests of investors.Because our country is now in the period of rapid economic development and transformation,some new factors that have a great impact on the old capital structure in the enterprise may appear at any time,which can influence the enterprise value in turn.In China's securities market which pays more attention to the company's investment value,investors will pay more and more attention to inner relationship between the company's capital structure and the enterprise value.Therefore,research of the link between them is very necessary.Electric power industry is the foundation of the industry in China.The sustainable development of it is the important guarantee of national economy running smoothly.Along with the electric power system reform in our country continues to deepen,the national policy support strength of the electric power industry is weakening while the financing demand of electric power enterprise is growing.In order to get more funds to satisfy their own development needs,electric power enterprises must have to consider more ways to raise funds.And its capital structure must change correspondingly.Paying close attention to its enterprise value change becomes very necessary.In addition,the electric power industry in our country becomes a very distinctive industry groups in China's stock market with its superior performance,relatively low investment risk and good enterprise development prospect in the future.Relevant information,data,and so on are relatively easy to be obtained.The necessary conditions in many aspects to carry on the empirical research of it have been developed.The feasibility of the research has already possessed.On the basis of reading a large number of previous literatures,this paper uses the method of factor analysis,selects twelve financial evaluation indexes,and extracts four common factors to represent the enterprise value.Then through the regression analysis of empirical research to finally draw the conclusion that the capital structure of China's electricity market and corporate value is negatively correlated,and found that a certain degree of concentration of ownership of listed companies and power companies are positively correlated.In view of the conclusion of the study,this paper gives some suggestions for the reference of listed electric power companies.