The Influence Of Inflation And Carbon Emission Reduction On Optimal Leverage Strategy In Uncertain Environment

Capital structure is not only the division of enterprise financing structure,it has a significant impact on capital strategy coordination,capital operation implementation,capital value creation.Since the famous American economists Modigliani and Miller put forward the classic MM theory,the theory of capital structure has become the focus of academic research.Because the capital structure as the value of the enterprise,contains a series of structural problems of the enterprise,is the comprehensive reflection of the following structures in the financial decision-making and planning of the enterprise: financing benefit structure,financing risk structure,financing cost structure financing time structure and financing space structure.The management of capital structure is to seek a reasonable balance among the financial leverage benefits,financing costs and financing risks in the process of enterprise financing.Whether the capital structure is reasonable or not determines the solvency,refinancing ability and future profitability of an enterprise to a large extent.The optimal capital structure is ideal,but the target capital structure can be determined.However,previous studies focused more on the relationship between capital structure and market value,as well as the influencing factors of capital structure.In order to increase enterprise value,all kinds of resource providers cooperate with each other and form a community of interests.The goal of corporate governance is to deal with the interest relationship among different stakeholders in order to achieve sustainable development of enterprises.Based on the existing research at home and abroad,this paper makes an empirical study on the impact of inflation,carbon emission reduction and Knightian uncertainty on the capital structure adjustment of enterprises.First,the dynamic model of leverage is established under the inflationary environment.Stochastic differential equations are used to describe the process of cash flow,short-term debt and inflation.Based on ITO formula and dynamic programming principle,Hamilton-JacobieBehrman equation of firm value is derived.Then,based on the model of enterprise emission reduction cost,the Hamilton-Jacoby-Behrman equation of equity value is derived through ITO formula and dynamic programming principle.Finally,considering Knightian uncertainty in the framework of sublinear expectation will have a certain impact on the firm’s value and capital structure.The results are numerically simulated to explore how these factors affect the change of equity value,enterprise value and leverage respectively.The results show that,first of all,high expected inflation rate leads to low enterprise value,while high inflation volatility environment corresponds to high enterprise value under the jumping diffusion environment and considering equity issuance cost.High inflation volatility leads to prudent leverage,while high expected inflation may lead firms to be more aggressive in their leverage management.Secondly,in the short term,the increase of emission reduction ratio will reduce the equity value and enterprise value as a whole.Under the same debt-to-Ebit ratio,the higher the emission reduction ratio is,the higher the leverage level the enterprise chooses.Finally,in the early stage,the equity value and the enterprise value decrease with the increase of the degree of Knightian uncertainty,but in the later stage,the leverage level of the enterprise decreases with the increase of the degree of Knightian uncertainty of the enterprise income.The conclusion of the study provides effective evidence for the financing choice and leverage management of enterprises,which is conducive to reducing the business risk of enterprises.The consideration of inflation,enterprises’ emission reduction behavior and Knightian uncertainty provides a beneficial supplement for the development of the existing corporate capital structure theory.