The paper chooses Surrogate theorem as direction by discussing diversified theories of capital structure and empirical study about China capital market. Surrogate theorem reveals three approaches for study of relationship between capital structure and firm value. By analyzing three approaches, the paper chooses the approach of computing firm value. Using firm value formula of Charles R. Wolf, the paper separate firm value into current operations value(COV) and future growth value(FGV). And the paper studies the relation between capital structure and firm value using data of listed realty companies in china. The conclusion of empirical test shows debt is relevant to the firm value, so listed companies should add debt into improve the firm value. |