金融Essay模板：Essay on Capital Structure in Modern Day Businesses
本文是金融专业的Essay范例，题目是“Essay on Capital Structure in Modern Day Businesses（论现代企业的资本结构）”，现代资本结构是基于莫迪利阿尼和米勒(MM)定理。它指出，在一个没有税收、破产成本和不对称信息的市场中，在一个有效的市场中，公司的整体市场价值不会受到融资方式的影响。这就形成了权衡理论和啄序理论的基础。
由于没有完美的市场条件，每个方面都将根据资本结构的方式产生影响。有两种理论背后的结构应该控制,啄序理论,它是由斯图尔特·c·迈尔斯和尼古拉斯Majluf 1984年[1],并权衡理论,被认为是这方面的先驱回到克劳斯和Litzenberger但许多包括Modilgliani自己理解的理论发展。
The way we think about capital structure in the modern day is based around the Modigliani and Miller(MM) theorem. It states that a market absent of tax, bankruptcy costs and asymmetric information, and in an efficient market, a company’s overall market value will not be affected depending on how it is financed. This then forms the basis of the trade off theory and the pecking order theory. As there is no perfect market conditions each aspect will have an effect based on the way the capital is structured. There are two theories behind the way the structure should be controlled, the pecking order theory, which was created by Stewart C. Myers and Nicolas Majluf in 1984[1], and the trade off theory, which was considered to be pioneered by back to Kraus and Litzenberger but many including Modilgliani himself are understood to have developed the theory.
The way that a company’s finances are structured is particularly important in light of the latest world recession. As seen in the Asian crisis in 1997 where all share markets became very volatile. It is not that capital structure has a large affect on a causing financial crisis, but rather that it will decide the impact on a firm during the financial crisis. This is relevant especially in the banking industry where assets are put under severe strain during a crisis [2].
鉴于最近的全球经济衰退，一家公司的财务结构方式尤其重要。正如我们在1997年亚洲金融危机中看到的那样，当时所有的股票市场都变得非常不稳定。并不是说资本结构对金融危机的起因有很大的影响，而是它将决定金融危机期间对企业的影响。这在银行业尤其重要，因为在危机期间，银行业的资产受到了严重的压力。
I have chosen to approach the issue by setting out the basics of the theory’s and their respective advantages and disadvantages, along with the premise behind why they are valid in capital structure. It will be backed by empirical evidence conducted from studies to back up my proposals.
Pecking order theory suggests that companies should prioritise the way in which they raise finance. The pecking order relates to the hierarchy that the company follows, from the most appropriate to the least. The pecking order claims that the least preferred method is through equity financing. Rather to initially use internal sources and then issue debt until it is no longer suitable. The basic idea was developed around the original the Modigliani and Miller theorem. In contrast though a true market does not poses the same attributes as the MM theory. From the original paper by Myers and Majluf (1984) [4] developed a model that showed that capital structure was designed to limit the inefficiencies of caused by informational asymmetries. The informational asymmetries states that a manager will know more about the assets of a firm and their future growth prospects than the average outside investor, causing inequality in the market.
啄序理论认为，公司应该优先考虑融资方式。等级顺序与公司遵循的等级制度有关，从最合适的到最不合适的。按顺序排列，最不受欢迎的方法是通过股权融资。而不是最初利用内部资源，然后发行债务，直到不再合适。它的基本思想是围绕莫迪利阿尼和米勒定理发展起来的。相比之下，一个真正的市场并不具有MM理论所具有的属性。从Myers和Majluf(1984)的原始论文中，[4]开发了一个模型，表明资本结构的设计是为了限制由信息不对称引起的低效率。信息不对称是指管理者比一般外部投资者更了解公司的资产及其未来增长前景，从而导致市场不平等。
From Murray Z. Frank Vidhan K. Goyal (2002) [6] I have established that though debt on the other hand is subject to minor adverse problems, equity causes a major adverse selection problem. For an outside investor, equity is construed to be riskier than debt. Equity finance premiums have the higher negative consequence on the firm, and as it is virtually impossible to finance fully from Therefore, an outside investor will demand a higher rate of return on equity than on debt. Thus leading to the pecking order of finance structure.
To confirm the theory on asymmetric information, Viet Anh Dang [5] put forward that this model leads to a potential unfavourable selection problem due to the risk of the method of finance. Resulting in the fact that, investors will predict a decision not to issue securities to signal good news and vice versa. This problem leads to a pooling market equilibrium in which new shares can only be offered at a marked-down price.
为了证实信息不对称理论，Viet Anh Dang[5]提出，由于金融方法的风险，该模型导致了潜在的不利选择问题。结果，投资者会预测一个决定，不发行证券的信号是好消息，反之亦然。这个问题导致了一种集中市场均衡，在这种均衡中，新股只能以较低的价格出售。
The empirical specification for the test takes the following form:
flow is entirely offset by the change in debt.
The financing choice should be in favour of the financing instruments that are less risk and less sensitive to mis-pricing and valuation errors. Where again we find that equity is the most prone to inaccuracy followed by debt and finally internal sources which are absent of mistakes in valuation.
The earliest accredited study that found empirical evidence supporting all these theories was conducted by Baskin. J (1989)[6], this then led to further studies, though these have resulted in conflicting evidence as to the legitimacy of the theory. In the original Myers & Majluf (1984)[4] study the table below lists how firms were financially structured
最早得到认可的研究发现了支持所有这些理论的经验证据是由巴斯金进行的。J(1989)[6]，这导致了进一步的研究，尽管这些导致了冲突的证据，作为合法性的理论。在最初的Myers & Majluf(1984)[4]研究中，下表列出了公司的财务结构
It shows that firms had adopted the pecking order method to a degree by selecting to finance internally first followed by debt then last resort equity finance, but as this is a summary of countries each individual firm will differ. This is the exact problem with the pecking order theory, it isn’t individually tailored to best suit each business. This was proved by the table below
Ziad Zurigat’s (March 2009) study of the differing effect pecking order theory had on small and large firms. His findings showed, the estimated coefficients are lower for PDEF (0.421 and 0.592) for small and large firms respectively) than for
NDEF (0.569 and 0.648), implying that small and large Jordanian firms are less sensitive in increasing debt for financing than in reducing debt for soaking up surplus. However, as cleared, small Jordanian firms are less sensitive than large ones in increasing debt to finance their positive financial deficit and retiring debt to soak up surplus.
NDEF(0.569和0.648)，这意味着小型和大型约旦公司在增加债务融资方面比在减少债务以吸收盈余方面更不敏感。然而，正如清算的那样，小约旦公司在增加债务以资助其正财政赤字和偿还债务以吸收盈余方面不像大公司那么敏感。
The Trade-Off Theory of Capital Structure employs to the concept that a firm is able to manipulate the levels of debt and equity finance by balancing the costs and benefits to be most advantageously structured. As mentioned in the introduction it goes back to Kraus and Litzenberger who considered a balance between the dead-weight costs of bankruptcy and the tax saving benefits of debt.
To ensure that the debt is balanced the firm will consider the marginal benefits and the marginal costs, as the more debt is taken on the marginal benefit will decrease while the marginal cost will increase. When the marginal benefit is equal to the marginal and the firm’s value is optimised, there will be a trade off as to the point that debt becomes more detrimental than equity which will form the d/e ratio for the firm.
为了保证债务的平衡，企业会考虑边际效益和边际成本，因为在边际效益上承担的债务越多，边际效益就会减少，而边际成本就会增加。当边际效益等于边际效益，公司的价值被优化时，将会有一个权衡点，即债务变得比股权更有害，这将形成公司的d/e比率。
As stated before under a perfect market condition with no tax the finance structure is irrelevant, but as tax comes into play equity is again favoured in the trade off theory, this is because interest on debt reduces the tax liability of a firm in turn increasing the profits, this is called a tax shield. The cost of financial distress should equal the tax shield at the point of equilibrium.
The custom economic model used when interpreting the trade-off theory is the partial adjustment model (Jalilvand and Harris, 1984; Shyam-Sunder and Myers, 1999; Ozkan, 2001 and Fama and French, 2002), which is made up of two parts; a static part to describe how the ideal amount is determined and the dynamic partial adjustment process:
Where, yt = a firm’s financial ratio in period t,
yt-l = a firm’s financial ratio in period t-1,
yt*= the target level of a particular ratio
λ = the speed of adjustment coefficient i.e. how fast the firm returns to its target debt ratio3
Empirical Evidence supporting the trade off theory
Here we can see that from the research done in the paper the table is drawn from, it has been found that there are some explanatory variables which do not act as expected. Although this may be interpreted as the trade off model being inaccurate, there are still factors which do affect the businesses total debt as expected. The most important factors drawn from the table above are the business size, total debt ratio, effective tax rate and the non-debt tax shields. The reason why explanatory variables such as growth opportunities do not act as expected may be due to the differing size of businesses examined; splitting the data in to business size may be advantageous here.
在这里我们可以看到，从本文所做的研究得出的表格，已经发现有一些解释变量并没有像预期的那样发挥作用。虽然这可能被解释为权衡模型是不准确的，但仍有一些因素影响企业的总债务预期。从上表中得出的最重要的因素是企业规模、总负债比率、有效税率和非债务税盾。增长机会等解释变量的作用不像预期的那样，可能是因为所考察的企业规模不同;在这里，根据业务规模拆分数据可能是有利的。
The benefit of the trade off theory is that it is unique to each company’s situation, for example a company with safe, tangible assets that also generate high levels of income would likely seek a high debt target ratio as to fully Companies with safe, tangible assets and plenty of taxable income to shield ought to have high target ratio to fully utilise the tax shield. In the opposite direct a company that is Unprofitable with risky, intangible assets will usually rely on equity finance as it becomes the less risky option. As the uncertainty surround its income could make the tax shield non existent
权衡理论的好处是，它是独一无二的每个公司的情况，例如，一个公司的安全，有形资产，并产生高水平的收入，可能会寻求一个高的债务目标比率，与充分的公司，安全，有形资产和大量应税收入的遮挡应具有较高的目标率，以充分利用税收遮挡。相反，如果一家公司不盈利且有风险，无形资产通常会依靠股权融资，因为股权融资是风险较小的选择。由于围绕其收入的不确定性，可能使税收保护不复存在
One key flaw that was not in the original Modigliani and Miller (1963) study is that of the effect on personal income tax. Miller (1977) took this into account in his study and proved that in fact the total tax saving at the point of equilibrium was zero when income tax increase was applied to the tax shield. The following equations shows that the tax shield can even be detrimental for example if the tax rate on stock is less than the tax rate on bonds the result will be a negative impact on profits. The author further suggests that there should be no optimal debt ratio for any individual firms.
Where GL is the leverage gain for the shareholder:
Tc is the corporate tax rate
Tps is the personal income tax for common stock
TPB is the personal income tax for bonds
BL is the market value of the levered firm’s debt
There have been questions to the mutual exclusivity of the two theories, Carmen Cotei and Joseph Farhat (2009) studied this theory, and their conclusion was that The empirical results of the factors affecting the proportion of debt financing (reduction) and factors affecting the rate of adjustment imply that the pecking order theory and the trade-off theory are not mutually exclusive. Firms may strive for a target debt ratio range and within this range, the pecking order behavior may describe incremental decisions or, over time, firms may switch between target adjustment and pecking order behavior.
这两种理论的互斥性一直存在问题，Carmen Cotei和Joseph Farhat(2009)研究了这一理论，他们的结论是，影响债务融资比例(减少)的因素和影响调整率的因素的实证结果表明，啄序理论和权衡理论并不是相互排斥的。企业可能会争取一个目标债务比率范围，在这个范围内，啄食次序行为可能描述增量决策，或者随着时间的推移，企业可能会在目标调整和啄食次序行为之间切换。
Conclusion – reflection on theories – which is best suited? Does it differ between businesses, are they both legitimate ways of structuring capital?
In reflection it is clear that both theories offer a potential theory of dealing with capital structure, but the empirical evidence seems to suggest that the trade off theory is the more well rounded option. As it holds well in the custom economic model, outperforming the pecking order model in the key areas. There has been also some convincing proof in favour of the relationships between gearing and the conventional determining factors (except profitability), as predicted by trade-off structure. Non-debt tax shields and growth opportunities have been argued to be inversely related to debt ratio, while collateral value of assets and size are found to have positive effects upon gearing.
I do believe that to some degree the theories are simply a base to capital structure, and that each individual company must do its own assessment on the best way to structure capital in order to produce the best results.
我确实相信，在某种程度上，这些理论只是资本结构的基础，每个公司都必须对资本结构的最佳方式进行自己的评估，以产生最好的结果。
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