The Research On Capital Structure And Risks Of Threal Estate Companies In China

The real estate is a pillar of our national economy and occupies more and moreimportant position in China. But today high risk has been the biggest hard nut that needs tobe overcome in its growth process. A lot of scholars put forward that the risk of real estatecompanies in China is mostly caused by companies’ unreasonable internal capital structure,for example: the company falls into high level debt, if the outside environment changes,the company will sink into cash-strapped. Besides, unsteady real estate policy will alsoaggravate the risk of the company. So the choice of real companies’ capital structure isvery complex. This text carries on a research to the real estate companies’ capital structureand goes deep to see the risk of capital structure and the reason, directed puts forwardsome policy advice that can guard against of the risk. The research will benefits optimizingcapital structures of real estate companies, improving company value and boost thedevelopment of the real estate in China.The research of this thesis based on the theories of capital structure and risk, adoptedthe method of case analysis and studied the capital structure and risk problem of the realestate company in China. Firstly, the theory foundation defined the capital structure andrisk, pointed out the direction of this thesis. Furthermore, the third part analyzed the insideand outside environment of the whole real estate market, and the capital structure’scondition of real estate company in China; this part provide a beneficial backgroundsupport for the fourth part. Moreover the analysis of Greentown China found out that themacro environment, the condition of real estate market and corporations’ work are all theimportant factors that causes risks of the real estate companies’ capital structure. Finally,combined the above section, the end of article summarizes the capital structure and risk ofreal estate companies in China and put forwarded some practical suggestions to overcomeall the risks.