China's Listed Companies Capital Structure Optimization

Since the birth of the MM Theory in 1958, the subject of capital structure has received continuous attention from financial economists who never cease to investigating into its determination and adjustment. Until now, the capital structure theory has not yet provided positive methods determining corporate capital structure which means a big gap between theory and practice, the capital structure still is a puzzle.With China's market economy consist developing and enterprise traditional financing channels and ways of expanding. China's listed companies operating as an independent entity must make the capital of their own structural optimal decisions, to maximizing the value of a company. Though China's Shanghai and Shenzhen stock markets were more than 1,400 listed companies,most of them have unreasonable capital structure and unbalanced structure of debt financing, and so on. Listed company's capital structure optimization is to solving this problem above. Therefore, the study of China's listed company's capital structure optimization will undoubtedly have a profound practical significance.In addition to introduction, this paper is divided into four parts. The first part in order to analyze the capital structure of the listed corporations in our country, reviews all kinds of theories of different times on the capital structure, including traditional capital theory and modern capital theory and new capital theory. The second part has two sections. The first analyzes international capital structure. Second describes the surroundings where listed corporations finance and our companies' capital structure has many characteristics. So the third part analyzed the factors that influence capital structure of the listed companies from the internal and external sides, drawing a conclusion: A comparison, growth ,business enterprise scale, profit ability, non-obligation tax shield, present the relation to the capital structure; puts forward the suggestions to optimalize our listed companies' capital structure.The innovation of this article is using the right capital structure model to explain the estimated regression coefficients demonstrated maturity, size, profitability, non-debt tax shield related to the level of debt through 2006 financial data, and then presents the corresponding policy recommendations. However, due to difficulties in gathering data, the paper have not get further research on the listed company's capital structure particularly external causes.