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

1、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Optimal Capital Structure: Reflections on economic and other values By Marc Schauten & Jaap Spronk1 1. Introduction Despite a vast literature on the capital stru

2、cture of the firm see Harris and Raviv, 1991, Graham and Harvey, 2001, Brav et al., 2005, for overviews there still is a big gap between theory and practice see e.g. Cools, 1993, Tempelaar, 1991, Boot & Cools, 1997. Starting with the seminal work by Modigliani & Miller 1958, 1963, much attention has

3、 been paid to the optimality of capital structure from the shareholders point of view Over the last few decades studies have been produced on the effect of other stakeholders interests on capital structure. Well-known examples are the interests of customers who receive product or service guarantees

4、from the company see e.g. Grinblatt & Titman, 2002. Another area that has received considerable attention is the relation between managerial incentives and capital structure Ibid. Furthermore, the issue of corporate control2 see Jensen & Ruback, 1983 and, related, the issue of corporate governance3

5、see Shleifer & Vishney, 1997, receive a lions part of the more recent academic attention for capital structure decisions From all these studies, one thing is clear: The capital structure decision or rather, the management of the capital structure over time involves more issues than the imization of

6、the firms market value alone. In this paper, we give an overview of the different objectives and considerations that have been proposed in the literature. We make a distinction between two broadly defined situations. The first is the traditional case of the firm that strives for the imization of the

7、 value of the shares for the current shareholders. Whenever other considerations than value imization enter capital structure decisions, these considerations have to be instrumental to the goal of value imization. The second case concerns the firm that explicitly chooses for more objectives than val

8、ue imization alone. This may be because the shareholders adopt a multiple stakeholders approach or because of a different ownership structure than the usual corporate structure dominating finance literature. An example of the latter is the co-operation, a legal entity which can be found in a.o. many

9、 European countries. For a discussion on why firms are facing multiple goals, we refer to Hallerbach and Spronk 2002a, 2002b In Section 2 we will describe objectives and considerations that, directly or indirectly, clearly help to create and maintain a capital structure which is optimal for the valu

10、e imizing firm. The third section describes other objectives and considerations. Some of these may have a clear negative effect on economic value, others may be neutral and in some cases the effect on economic value is not always completely clear. Section 4 shows how, for both cases, capital structu

11、re decisions can be framed as multiple criteria decision problems which can then benefit from multiple criteria decision support tools that are now widely available2. imizing shareholder value According to the neoclassical view on the role of the firm, the firm has one single objective: imization of

12、 shareholder value. Shareholders possess the property rights of the firm and are thus entitled to decide what the firm should aim for. Since shareholders only have one objective in mind - wealth imization - the goal of the firm is imization of the firms contribution to the financial wealth of its sh

13、areholders. The firm can accomplish this by investing in projects with positive net present value4. Part of shareholder value is determined by the corporate financing decision5. Two theories about the capital structure of the firm - the trade-off theory and the pecking order theory - assume sharehol

14、der wealth imization as the one and only corporate objective. We will discuss both theories including several market value related extensions. Based on this discussion we formulate a list of criteria that is relevant for the corporate financing decision in this essentially neoclassical viewThe origi

15、nal proposition I of Miller and Modigliani 1958 states that in a perfect capital market the equilibrium market value of a firm is independent of its capital structure, i.e. the debt-equity ratio6. If proposition I does not hold then arbitrage will take place. Investors will buy shares of the underva

16、lued firm and sell shares of the overvalued shares in such a way that identical income streams are obtained. As investors exploit these arbitrage opportunities, the price of the overvalued shares will fall and that of the undervalued shares will rise, until both prices are equalWhen corporate taxes

17、are introduced, proposition I changes dramatically. Miller and Modigliani 1958, 1963 show that in a world with corporate tax the value of firms is a.o. a function of leverage. When interest payments become tax deductible and payments to shareholders are not, the capital structure that imizes firm va

18、lue involves a hundred percent debt financing. By increasing leverage, the payments to the government are reduced with a higher cash flow for the providers of capital as a result. The difference between the present value of the taxes paid by an unlevered firm Gu and an identical levered firm Gl is t

19、he present value of tax shields PVTS. Figure 1 depicts the total value of an unlevered and a levered firm7. The higher leverage, the lower Gl, the higher Gu - Gl PVTSIn the traditional trade-off models of optimal capital structure it is assumed that firms balance the marginal present value of intere

20、st tax shields8 against marginal direct costs of financial distress or direct bankruptcy costs.9 Additional factors can be included in this trade-off framework. Other costs than direct costs of financial distress are agency costs of debt Jensen & Meckling, 1976. Often cited examples of agency costs

21、of debt are the underinvestment problem Myers, 197710, the asset substitution problem Jensen & Meckling, 1976 and Galai & Masulis, 1976, the play for time game by managers, the unexpected increase of leverage combined with an equivalent pay out to stockholders to make to increase the impact, the ref

22、usal to contribute equity capital and the cash in and run game Brealey, Myers & Allan, 2006. These problems are caused by the difference of interest between equity and debt holders and could be seen as part of the indirect costs of financial distress. Another benefit of debt is the reduction of agen

23、cy costs between managers and external equity Jensen and Meckling, 1976, Jensen, 1986, 1989. Jensen en Meckling 1976 argue that debt, by allowing larger managerial residual claims because the need for external equity is reduced by the use of debt, increases managerial effort to work. In addition, Je

24、nsen 1986 argues that high leverage reduces free cash with less resources to waste on unprofitable investments as a result.11 The agency costs between management and external equity are often left out the trade-off theory since it assumes managers not acting on behalf of the shareholders only which

25、is an assumption of the traditional trade-off theoryIn Myers 1984 and Myers and Majlufs 1984 pecking order model12 there is no optimal capital structure. Instead, because of asymmetric information and signalling problems associated with external financing13, firms financing policies follow a hierarc

26、hy, with a preference for internal over external finance, and for debt over equity. A strict interpretation of this model suggests that firms do not aim at a target debt ratio. Instead, the debt ratio is just the cumulative result of hierarchical financing over time. See Shyum-Sunder & Myers, 1999.

27、Original examples of signalling models are the models of Ross 1977 and Leland and Pyle 1977. Ross 1977 suggests that higher financial leverage can be used by managers to signal an optimistic future for the firm and that these signals cannot be mimicked by unsuccessful firms14. Leland and Pyle 1977 f

28、ocus on owners instead of managers. They assume that entrepreneurs have better information on the expected cash flows than outsiders have. The inside information held by an entrepreneur can be transferred to suppliers of capital because it is in the owners interest to invest a greater fraction of hi

29、s wealth in successful projects. Thus the owners willingness to invest in his own projects can serve as a signal of project quality. The value of the firm increases with the percentage of equity held by the entrepreneur relative to the percentage he would have held in case of a lower quality project

30、. Copeland, Weston & Shastri, 2005. The stakeholder theory formulated by Grinblatt & Titman 200215 suggests that the way in which a firm and its non-financial stakeholders interact is an important determinant of the firms optimal capital structure. Non-financial stakeholders are those parties other

31、than the debt and equity holders. Non-financial stakeholders include firms customers, employees, suppliers and the overall community in which the firm operates. These stakeholders can be hurt by a firms financial difficulties. For example customers may receive inferior products that are difficult to

32、 service, suppliers may lose business, employees may lose jobs and the economy can be disrupted. Because of the costs they potentially bear in the event of a firms financial distress, non-financial stakeholders will be less interested ceteris paribus in doing business with a firm having a higher pot

33、ential for financial difficulties. This understandable reluctance to do business with a distressed firm creates a cost that can deter a firm from undertaking excessive debt financing even when lenders are willing to provide it on favorable terms Ibid., p. 598. These considerations by non-financial stakeholders are the cause of th