优化资本结构思考经济和其他价值资本结构外文文献翻译.docx

优化资本结构思考经济和其他价值资本结构外文文献翻译.docx

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优化资本结构思考经济和其他价值资本结构外文文献翻译

优化资本结构：

思考经济和其他价值---资本结构外文文献翻译

西安工业大学北方信息工程学院

毕业设计论文外文翻译资料

系别管理信息系

专业财务管理

班级B080510姓名郭静学号B08051019

导师王化中OptimalCapitalStructure:

Reflectionson

economicandothervalues

ByMarcSchauten&JaapSpronk1

1.Introduction

DespiteavastliteratureonthecapitalstructureofthefirmseeHarrisandRaviv,1991,GrahamandHarvey,2001,Bravetal.,2005,foroverviewstherestillisabiggapbetweentheoryandpracticeseee.g.Cools,1993,Tempelaar,1991,Boot&Cools,1997.StartingwiththeseminalworkbyModigliani&Miller1958,1963,muchattentionhasbeenpaidtotheoptimalityofcapitalstructurefromtheshareholders’pointofviewOverthelastfewdecadesstudieshavebeenproducedontheeffectofotherstakeholders’interestsoncapitalstructure.Well-known

examplesaretheinterestsofcustomerswhoreceiveproductorserviceguaranteesfromthecompanyseee.g.Grinblatt&Titman,2002.AnotherareathathasreceivedconsiderableattentionistherelationbetweenmanagerialincentivesandcapitalstructureIbid..Furthermore,theissue

ofcorporatecontrol2seeJensen&Ruback,1983and,related,theissueofcorporategovernance3seeShleifer&Vishney,1997,receivealion’spartofthemorerecentacademicattentionforcapitalstructuredecisionsFromallthesestudies,onethingisclear:

Thecapitalstructuredecisionorrather,themanagementofthecapitalstructureovertimeinvolvesmoreissuesthantheimizationofthefirm’smarketvaluealone.Inthispaper,

wegiveanoverviewofthedifferentobjectivesandconsiderationsthathavebeenproposedintheliterature.Wemakeadistinctionbetweentwobroadlydefinedsituations.Thefirstisthetraditionalcaseofthefirmthatstrivesfortheimizationofthevalueofthesharesforthecurrentshareholders.Wheneverotherconsiderationsthanvalueimizationentercapitalstructuredecisions,theseconsiderationshavetobeinstrumentaltothegoalofvalueimization.Thesecondcaseconcernsthefirmthatexplicitlychoosesformoreobjectivesthanvalueimizationalone.Thismaybebecausetheshareholdersadoptamultiplestakeholdersapproachorbecauseofadifferentownershipstructurethantheusualcorporatestructuredominatingfinanceliterature.Anexampleofthelatteristheco-operation,alegalentitywhichcanbefoundina.o.manyEuropeancountries.Foradiscussiononwhyfirmsarefacingmultiplegoals,werefertoHallerbachandSpronk2002a,2002bInSection2wewilldescribeobjectivesandconsiderationsthat,directlyorindirectly,clearlyhelptocreateandmaintainacapitalstructurewhichis'optimal'

forthevalueimizingfirm.Thethirdsectiondescribesotherobjectivesandconsiderations.Someofthesemayhaveaclearnegativeeffectoneconomicvalue,othersmaybeneutralandinsomecasestheeffectoneconomicvalueisnotalwayscompletelyclear.Section4showshow,forbothcases,capitalstructuredecisionscanbeframedasmultiplecriteriadecisionproblemswhichcanthenbenefitfrommultiplecriteriadecisionsupporttoolsthatarenowwidelyavailable2.imizingshareholdervalue

Accordingtotheneoclassicalviewontheroleofthefirm,thefirmhasonesingleobjective:

imizationofshareholdervalue.Shareholderspossessthepropertyrightsofthefirmandarethusentitledtodecidewhatthefirmshouldaimfor.Sinceshareholdersonlyhaveoneobjectiveinmind-wealthimization-thegoalofthefirmisimizationofthefirm'scontributiontothefinancialwealthofitsshareholders.Thefirmcanaccomplishthisbyinvestinginprojectswithpositivenetpresentvalue4.Partofshareholdervalueisdeterminedbythecorporatefinancingdecision5.Twotheoriesaboutthecapitalstructureofthefirm-thetrade-offtheoryandthepeckingordertheory-assumeshareholderwealthimizationastheoneandonlycorporateobjective.Wewilldiscussboththeoriesincludingseveralmarketvaluerelatedextensions.BasedonthisdiscussionweformulatealistofcriteriathatisrelevantforthecorporatefinancingdecisioninthisessentiallyneoclassicalviewTheoriginalpropositionIofMillerandModigliani1958statesthatina

perfectcapitalmarkettheequilibriummarketvalueofafirmisindependentofitscapitalstructure,i.e.thedebt-equityratio6.IfpropositionIdoesnotholdthenarbitragewilltakeplace.Investorswillbuysharesoftheundervaluedfirmandsellsharesoftheovervaluedsharesinsuchawaythatidenticalincomestreamsareobtained.Asinvestorsexploitthesearbitrageopportunities,thepriceoftheovervaluedshareswillfallandthatoftheundervaluedshareswillrise,untilbothpricesareequalWhencorporatetaxesareintroduced,propositionIchangesdramatically.MillerandModigliani1958,1963showthatinaworldwithcorporatetaxthevalueoffirmsisa.o.afunctionofleverage.Wheninterestpaymentsbecometaxdeductibleandpaymentstoshareholdersarenot,thecapitalstructurethatimizesfirmvalueinvolvesahundredpercentdebtfinancing.Byincreasingleverage,thepaymentstothegovernmentarereducedwithahighercashflowfortheprovidersofcapitalasaresult.ThedifferencebetweenthepresentvalueofthetaxespaidbyanunleveredfirmGuandanidenticalleveredfirmGlisthepresentvalueoftaxshieldsPVTS.Figure1depictsthetotalvalueofanunleveredandaleveredfirm7.Thehigherleverage,thelowerGl,thehigherGu-GlPVTSInthetraditionaltrade-offmodelsofoptimalcapitalstructureitisassumedthatfirmsbalancethemarginalpresentvalueofinteresttaxshields8againstmarginaldirectcostsoffinancialdistressordirectbankruptcycosts.9Additionalfactorscanbeincludedinthistrade-off

framework.OthercoststhandirectcostsoffinancialdistressareagencycostsofdebtJensen&Meckling,1976.OftencitedexamplesofagencycostsofdebtaretheunderinvestmentproblemMyers,197710,theassetsubstitutionproblemJensen&Meckling,1976andGalai&Masulis,1976,the'playfortime'gamebymanagers,the'unexpectedincreaseofleveragecombinedwithanequivalentpayouttostockholderstomaketoincreasetheimpact',the'refusaltocontributeequitycapital'andthe'cashinandrun'gameBrealey,Myers&Allan,2006.Theseproblemsarecausedbythedifferenceofinterestbetweenequityanddebtholdersandcouldbeseenaspartoftheindirectcostsoffinancialdistress.AnotherbenefitofdebtisthereductionofagencycostsbetweenmanagersandexternalequityJensenandMeckling,1976,Jensen,1986,1989.JensenenMeckling1976arguethatdebt,byallowinglargermanagerialresidualclaimsbecausetheneedforexternalequityisreducedbytheuseofdebt,increasesmanagerialefforttowork.Inaddition,Jensen1986arguesthathighleveragereducesfreecashwithlessresourcestowasteonunprofitableinvestmentsasaresult.11Theagencycostsbetweenmanagementandexternalequityareoftenleftoutthetrade-offtheorysinceitassumesmanagersnotactingonbehalfoftheshareholdersonlywhichisanassumptionofthetraditionaltrade-offtheoryInMyers'1984andMyersandMajluf's1984peckingordermodel12thereisnooptimalcapitalstructure.Instead,becauseofasymmetricinformationand

signallingproblemsassociatedwithexternalfinancing13,firm'sfinancingpoliciesfollowahierarchy,withapreferenceforinternaloverexternalfinance,andfordebtoverequity.Astrictinterpretationofthismodelsuggeststhatfirmsdonotaimatatargetdebtratio.Instead,thedebtratioisjustthecumulativeresultofhierarchicalfinancingovertime.SeeShyum-Sunder&Myers,1999.OriginalexamplesofsignallingmodelsarethemodelsofRoss1977andLelandandPyle1977.Ross1977suggeststhathigherfinancialleveragecanbeusedbymanagerstosignalanoptimisticfutureforthefirmandthatthesesignalscannotbemimickedbyunsuccessfulfirms14.LelandandPyle1977focusonownersinsteadofmanagers.Theyassumethatentrepreneurshavebetterinformationontheexpectedcashflowsthanoutsidershave.Theinsideinformationheldbyanentrepreneurcanbetransferredtosuppliersofcapitalbecauseitisintheowner'sinteresttoinvestagreaterfractionofhiswealthinsuccessfulprojects.Thustheowner'swillingnesstoinvestinhisownprojectscanserveasasignalofprojectquality.Thevalueofthefirmincreaseswiththepercentageofequityheldbytheentrepreneurrelativetothepercentagehewouldhaveheldincaseofalowerqualityproject.Copeland,Weston&Shastri,2005.

ThestakeholdertheoryformulatedbyGrinblatt&Titman200215suggeststhatthewayinwhichafirmanditsnon-financialstakeholdersinteractisanimportantdeterminantofthefirm'soptimalcapital

structure.Non-financialstakeholdersarethosepartiesotherthanthedebtandequityholders.Non-financialstakeholdersincludefirm'scustomers,employees,suppliersandtheoverallcommunityinwhichthefirmoperates.Thesestakeholderscanbehurtbyafirm'sfinancialdifficulties.Forexamplecustomersmayreceiveinferiorproductsthataredifficulttoservice,suppliersmaylosebusiness,employeesmaylosejobsandtheeconomycanbedisrupted.Becauseofthecoststheypotentiallybearintheeventofafirm'sfinancialdistress,non-financialstakeholderswillbelessinterestedceterisparibusindoingbusinesswithafirmhavingahigherpotentialforfinancialdifficulties.ThisunderstandablereluctancetodobusinesswithadistressedfirmcreatesacostthatcandeterafirmfromundertakingexcessivedebtfinancingevenwhenlendersarewillingtoprovideitonfavorabletermsIbid.,p.598.Theseconsiderationsbynon-financialstakeholdersarethecauseofth