Abstract

Controlling the capital structure is crucial to the financial management of the business. Maximizing the company's worth requires finding the appropriate capital structure. In this study, the relationship between corporate capital structure and corporate value is further investigated using the weighted average cost of capital (WACC) and capital asset pricing model (CAPM) analyses of four capital structure theories, including M&Ms First and Second Theories, the Trade-off Theory and the Pecking Order Theory, which examine the reasons why listed businesses' financing sequence conflicts with western thinking and point out its uniqueness and policy recommendations based on the current situation of China's stock market.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call