An Analysis Of The Impact Of Stock Option Incentive On The Dynamic Adjustment Of Capital Structure

Equity incentive is to give the company's executives a certain share of the company,so that the number of shares will be given to determine its control of the company,which will affect the changes in the capital structure.And stock option incentive(the most important way of equity incentive),its application has aroused extensive concern in the academic circle,and the conflict between the interests of managers and the interests of the company is the key to solving the agency problem since the theory of principal agent.Therefore,it is a good medicine to solve the principal agent problem by properly motivating management.In this way,the management can change the behavior to adjust the capital structure,make the actual capital structure closer to the target capital structure,and make the benefit of the enterprise better.But successive executives use stock options to encourage cash in the event(Erie shares)to let people question this solution.The research on stock option incentive or capital structure adjustment can be found everywhere in academia.This paper combines the two aspects of stock option incentive and capital structure adjustment,and deeply studies the relationship between them.At the same time,it also provides some theoretical guidance for the stock option incentive and capital structure practice.This paper first introduces the background and significance of the theory of stock option incentive and capital structure research,and gives a framework description of the innovation points and shortcomings of the research methods,reviews the stock option incentive and the theoretical results of the capital structure,and analyzes and defines the concepts of the two.The development context of stock option incentive in China is expounded and summarized to conclude the current situation of the current implementation of equity incentive and stock option incentive in China,as well as some significant problems.Based on these theories and status,three important theoretical hypotheses are put forward from the overall situation,the nature of the enterprise and the situation of liabilities,respectively.The two models,respectively,on the impact of the implementation of stock option incentive on the speed and degree of deviation of capital structure,finally draw a conclusion,and put forward some practical suggestions and Countermeasures against the conclusion and the actual situation.The conclusions of this paper are: first,the speed of capital structure adjustment will gradually slow down with the increase of the incentive intensity of stock options,and the gap between the actual capital structure and the target capital structure becomes larger.Second,according to the nature of the enterprise and the level of debt,the enterprises are divided into four situations,which are state-owned and non state,debt shortage and excessive debt.The speed of capital structure adjustment in state-owned enterprises will be more and more slow with the increase of incentive intensity of stock options,compared with enterprises under excessive debt situation.In the case of lack of debt,the incentive of the enterprise stock option is stronger to restrain the adjustment speed of the capital structure,and the difference between the actual and the optimal capital structure is also greater.Third,the size,profitability,growth ability,asset guarantee value,and median capital structure of enterprises will have an impact on capital structure.Nor will there be any difference between the nature of the enterprise and the liabilities of the company.It is robust.In a word,through this study,the implementation of stock option in the development of capital structure began to highlight,but there are still some problems.We should strengthen market supervision to improve its environment and better play the positive role of stock option incentive in the company's efficiency.