The Ascertainment Of The Concession Period In BOT Project Based On The Capital Structure

According to the famous Wagner theorem: After entering the industrialization, The public department's quantity and scale shows a tendency to expand, The proportion of public expenditure in the social total expenditure also show an expanding tendency .At the same time, the financing of public production simply rely on national finance is limited, furthermore, the efficiency that the government manages the public project is low, thus, The construction of the infrastructure introduces the privately owned capital imperatively , under this condition, BOT project financing emerge as the times require.Sometimes there are large capitals, high cost, and long cost recycling time in infrastructure project, so its financing channel has to be combined by many ways. Different financing channel means different capital structure, and different capital structure affect the cost, income and the cash flows, and so on. As a result, the capital structure plays an important role in confirming the ultimately benefit relationships. However, BOT concession period is a time boundary in confirming the profit contribution and the rights between the government and the project company, and it is also a time boundary in confirming the Property rights and Management power. BOT concession period is an important index about time and economy. In traditional NPV model for BOT concessionary terms, it neglect equity's opportunity cost and risk reward rate. So it can not reflect the capital structure completely. No study shows how to ascertain concession period when the capital structure is taken into consideration.Based on the above questions, this paper mostly completes two tasks:1. In view of the limitation on traditional NPV model, this paper constructs a math model calculating the concession period length, which based on the CAPM model that can adjust the limitation in traditional method, thus the new model could be more reasonable.2. According to the model above, the logical research and experience research are used, and qualify and quantity method is also used. The model can adjust concession period lengthaccording to the capital structure taken by project company. So the model ensures the rights and interests between government and project company. In the course, have gotten following conclusions:1. Concession period length is relevant to the stock capital ratio;2. Using the CAPM model, the introduction in project's capital structure model is a scientific method to reflect the cost accurately when it used to evaluate the concession period.