The effects of capital structure changes on security prices
资本结构(Capital Structure)
Teaching Team of Advanced Financial Management
2
Definition of Capital Structure
Concept of Capital Structure Features of Modern Firms’ Capital Structure
2018/11/30
Teaching Team of Advanced Financial Management
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Capital structure is a dynimic system Optimal capital structure is relative, it should harmonize in motion, optimally choose in variation
Capital structure is a evolving system affected by many factors Capital structure integrates capital with different components,ownerships,time span and levels
2018/11/30
Teaching Team of Advanced Financial Management
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Driving by Financial Leverage
When arranging capital structure, financial leverage interests are the most direct driving force of using debt. As long as expected rate of return is higher than interests of debt,return on equity(ROE) will be increased by using debt. Interests cost dan shield tax,pre-tax debt costs are lower than pre-tax equity costs.
The Effects of Climate Change on Human Rights
The Effects of Climate Change on Human Rights Climate change is one of the most significant challenges facing humanity today. It is a global phenomenon that affects every aspect of our lives, from the food we eat to the air we breathe. Climate change is caused by a range of factors, including human activities such as burning fossil fuels, deforestation, and agriculture. The effects of climate change are far-reaching and have the potential to impact human rights in many ways.One of the most significant impacts of climate change on human rights is the threat to the right to life. Climate change is causing more frequent and severe natural disasters such as floods, hurricanes, and droughts. These disasters can result in the loss of life, displacement of communities, and destruction of homes and infrastructure. The most vulnerable communities, such as those living in poverty or in low-lying areas, are often the most affected by these disasters, putting their right to life at risk.Another human right that is threatened by climate change is the right to health. Climate change is causing an increase in air pollution, which can lead to respiratory diseases such as asthma and lung cancer. Extreme heatwaves can also cause heatstroke and other heat-related illnesses. In addition, climate change is leading to the spread of diseases such as malaria and dengue fever, which are carried by mosquitoes that thrive in warmer temperatures.Climate change is also affecting the right to food. Changes in temperature and rainfall patterns are affecting crop yields, leading to food shortages and higher prices. This is particularly affecting small-scale farmers who rely on rain-fed agriculture. In addition, climate change is affecting the availability of fish, which is a vital source of protein for many communities around the world.The right to water is also being threatened by climate change. Changes in rainfall patterns are affecting the availability of water in many regions, leading to water scarcity and drought. This is particularly affecting communities in arid and semi-arid regions, where water is already scarce. In addition, rising sea levels are contaminating freshwater sources with saltwater, making it more difficult for communities to access safe drinking water.Finally, climate change is affecting the right to housing. Natural disasters such as floods and hurricanes are destroying homes and infrastructure, leaving communities without shelter. In addition, rising sea levels are causing coastal erosion, which is threatening the homes of millions of people around the world. This is particularly affecting communities in low-lying areas such as small island states.In conclusion, climate change is having a significant impact on human rights. It is threatening the right to life, health, food, water, and housing. The most vulnerable communities are often the most affected by these impacts, putting their human rights at risk. It is essential that we take urgent action to address climate change and protect the human rights of all people, particularly those who are most vulnerable. This requires a global effort to reduce greenhouse gas emissions, adapt to the impacts of climate change, and support those who are most affected by its impacts.。
外文译文
A Review of the Capital Structure Theories1.IntroductionSince the publication of the Modigliani and Miller’s(1958)“irrelevance theory of capital structure”,the theory of corporate capital structure has been a study of interest to finance economists.Over the years three major theories of capital structure emerged which diverge from the assumption of perfect capital markets under which the“irrelevance model”is working.The first is the trade-off theory which assumes that firms trade off the benefits and costs of debt and equity financing and find an“optimal”capital structure after accounting for market imperfections such as taxes,bankruptcy costs and agency costs.The second is the pecking order theory(Myers,1984,Myers and Majluf,1984)that argues that firms follow a financing hierarchy to minim-ize the problem of information asymmetry between the firm’s managers-insiders and the outsiders-shareholders.Recently,Baker and Wurgler(2002)have suggested a new theory of capital structure:the “market timing theory of capital structure”.This theory states that the current capital structure is the cumulative outcome of past attempts to time the equity market.Market timing implies that firms issue new shares when they perceive they are overvalued and that firms repurchase own shares when they consider these to be undervalued.Market timing issuing behaviour has been well established empirically by others already,but Baker and Wurgler show that the influence of market timing on capital structure is highly persistent.2.The Modigliani-Miller TheoremThe theory of business finance in a modern sense starts with the Modigliani and Miller(1958) capital structure irrelevance proposition.Before them,there was no generally accepted theory of capital structure.Modigliani and Miller start by assuming that the firm has a particular set of expected cash flows.When the firm chooses a certain proportion of debt and equity to finance its assets,all that it does is to divide up the cash flows among investors.Investors and firms are assumed to have equal access to financial markets,which allows for homemade leverage.The investor can create any leverage that was wanted but not offered,or the investor can get rid of any leverage that the firm took on but was not wanted.As a result,the leverage of the firm has no effect on the market value of the firm.Their paper lead subsequently to both clarity and controversy.As a matter of theory,capital structure irrelevance can be proved under a range of circumstances.There are two fundamentally different types of capital structure irrelevance propositions.The classic arbitrage-based irrelevance propositions provide settings in which arbitrage by investors keeps the value of the firm independent of its leverage.In addition to the original Modigliani and Miller paper, important contributions include papers by Hirshleifer(1966)and Stiglitz(1969).The second irrelevance proposition concludes that“given a firm’s investment policy,the dividend payout it chooses to follow will affect neither the current price of its shares nor the total return to its shareholders”(Miller and Modigliani,1961).In other words,in perfect markets,neither capital structure choices nor dividend policy decisions matter.The 1958 paper stimulated serious research devoted to disproving irrelevance as a matter of theory or as an empirical matter.This research has shown that the Modigliani-Miller theorem fails under a variety of circumstances.The most commonly used elements include consideration of taxes,transaction costs,bankruptcycosts,agency conflicts,adverse selection,lack of separability between financing and operations,time-varying financial market opportunities,and investor clientele effects.Alternative models use differing elements from this list.Given that so many different ingredients are available,it is not surprising that many different theories have been proposed.Covering all of these would go well beyond the scope of thispaper.Harris and Raviv(1991)provided a survey of the development of this theory as of 1991.As an empirical proposition,the Modigliani-Miller irrelevance proposition is not easy to test. With debt and firm value both plausibly endogenous and driven by other factors such as profits, collateral,and growth opportunities,we cannot establish a structural test of the theory by regressing value on debt.But the fact that fairly reliable empirical relations between a number of factors and corporate leverage exist,while not disproving the theory,does make it seem an unlikely characterization of how real businesses are financed.A popular defense has been to argue as follows:“While the Modigliani-Miller theorem does not provide a realistic description of how firms finance their operations,it provides a means of finding reasons why financing may matter.”This description provides a reasonable interpretation of much of the theory of corporate finance.Accordingly,it influenced the early development of both the trade-off theory and the pecking order theory.3.The Trade-Off TheoryThe term trade-off theory is used by different authors to describe a family of related theories.In all of these theories,a decision maker running a firm evaluates the various costs and benefits of alternative leverage plans.Often it is assumed that an interior solution is obtained so that marginal costs and marginal benefits are balanced.The original version of the trade-off theory grew out of the debate over the Modigliani-Miller theorem.When corporate income tax was added to the original irrelevance,this created a benefit for debt in that it served to shield earnings from taxes.Since the firm's objective function is linear,and there is no offsetting cost of debt,this implied 100%debt financing.Several aspects of Myers' definition of the trade-off merit discussion.First,the target is not directly observable.It may be imputed from evidence,but that depends on adding a structure.Different papers add that structure in different ways.Second,the tax code is much more complex than that assumed by thetheory.Depending on which features of the tax code are included,different conclusions regarding the target can be reached.Graham(2003)provides a useful review of the literature on the tax effects.Third,bankruptcy costs must be deadweight costs rather than transfers from one claimant to another.The nature of these costs is important too.Haugen andSenbet(1978)provide a useful discussion of bankruptcy costs.Fourth,transaction costs must take a specific form for the analysis to work.For the adjustment to be gradual rather than abrupt,the marginal cost of adjusting must increase when the adjustment is larger.Leary and Roberts(2005)describe the implications of alternative adjustment cost assumptions.Static trade-off theoryThe static trade-off theory affirms that firms have optimal capitalstructures,which they determine by trading off the costs against the benefits of the use of debt and equity.One of the benefits of the use of debt is the advantage of a debt tax shield.One of the disadvantages of debt is the cost of potential financialdistress,especially when the firm relies on too much debt. Already,this leads to a trade-off between the tax benefit and the disadvantage of higher risk of financial distress.But there are more cost and benefits involved with the use of debt and equity.One other major cost factor consists of agency costs.Agency costs stem from conflicts of interest between the different stakeholders of the firm and because of ex post asymmetric information (Jensen and Meckling(1976)andJensen(1986)).Hence,incorporating agency costs into the static trade-off theory means that a firm determines its capital structure by trading off the tax advantage of debt against the costs of financial distress of too much debt and the agency costs of debt against the agency cost of equity.Many other cost factors have been suggested under the trade-off theory,and it would lead to far to discuss them all.Therefore,this discussion ends with the assertion that an important prediction of the static trade-off theory is that firms target their capital structures,i.e.if the actual leverage ratio deviates from the optimal one,the firm will adapt its financing behaviour in a way that brings the leverage ratio back to the optimal level.The Dynamic Trade-off TheoryConstructing models that recognize the role of time requires specifying a number of aspects that are typically ignored in a single-period model.Of particular importance are the roles of expectations and adjustment costs.In a dynamic model,the correct financing decision typically depends on the financing margin that the firm anticipates in the next period.Some firms expect to pay out funds in the next period,while others expect to raise funds.If funds are to be raised,they may take the form of debt or equity.More generally,a firm undertakes a combination of these actions.An important precursor to modern dynamic trade-off theories wasStiglitz(1973),who examines the effects of taxation from a public finance perspective.Stiglitz's model is not a trade-off theory since he took the drastic step of assuming away uncertainty.The first dynamic models to consider the tax savings versus bankruptcy cost trade-off are Kane etal.(1984)and Brennan and Schwartz(1984).Both analyzed continuous time models with uncertainty,taxes,and bankruptcy costs,but no transaction costs.Since firms react to adverse shocks immediately by rebalancing costlessly,firms maintain high levels of debt to take advantage of the tax savings.Dynamic trade-off models can also be used to consider the option values embedded in deferring leverage decisions to the next period.Goldstein etal.(2001)observe that a firm with low leverage today has the subsequent option to increase leverage.Under their assumptions,the option to increase leverage in the future serves to reduce the otherwise optimal level of leverage today.Strebulaev(2007)analyzed a model quite similar to that of Fischer et al.(1989)and Goldstein et al.(2001).Again,if firms optimally finance only periodically because of transaction costs,then the debt ratios of most firms will deviate from the optimum most of the time.In the model,the firm's leverage responds less to short-run equity fluctuations and more to long-run value changes.Certain ideas are fairly general in dynamic models.The optimal financial choice today depends on what is expected to be optimal in the next period.In the next period,it may be optimal to raise funds or to pay them out.If raising new funds,it might be optimal to raise them in the form of debt or in the form of equity.In each case,what is expected to be optimal in the next period will help to pin down the relevant comparison for the firm in the current period.Much of the work on dynamic trade-off models is fairly recent and so any judgements on their results must be somewhat tentative.This work has already fundamentally altered our understanding of mean reversion,the role of profits,the role of retained earnings,and path dependence.As a result,the trade-off class of models now appears to be much more promising than it did even just a few years ago.4.The Pecking Order TheoryThe pecking order theory does not take an optimal capital structure as a starting point,but instead asserts the empirical fact that firms show a distinct preference for using internal finance(as retained earnings or excess liquid assets)over external finance.If internal funds are not enough to finance investment opportunities,firms may or may not acquire external financing,and if they do,they will choose among the different external finance sources in such a way as to minimise additional costs of asymmetric informatio n.The latter costs basically reflect the“lemonpremium”(Akerlof,1970)that outside investors ask for the risk of failure for the average firm in the market.The resulting pecking order of financing is asfollows:internally generated funds first,followed by respectively low-risk debt financing and share financing.In Myers and Majluf model(1984),outside investors rationally discount the firm's stock price when managers issue equity instead of riskless debt.To avoid this discount,managers avoid equity whenever possible.The Myers and Majluf model predicts that managers will follow a pecking order,using up internal funds first,then using up risky debt,and finally resorting to equity.In the absence of investment opportunities,firms retain profits and build up financial slack to avoid having to raise external finance in the future.The pecking order theory regards the market-to-book ratio as a measure of investment opportunities.With this interpretation in mind,both Myers(1984)and Fama and French(2000)note that a contemporaneous relationship between themarket-to-book ratio and capital structure is difficult to reconcile with the static pecking order model.Iteration of the static version also suggests that periods of high investment opportunities will tend to push leverage higher toward a debt capacity.Tothe extent that high past market-to-book actually coincides with high past investment,however,results suggest that such periods tend to push leverage lower.Empirical evidence supports both the pecking order and the trade-offtheory.Empirical tests to see whether the pecking order or the trade-off theory is a better predictor of observed capital structures find support for both theories of capital structure(Shyam-Sunder and Myers,1999; Fama and French,2002).5.The Market timing theoryThe market timing theory of capital structure argues that firms time their equity issues in the sense that they issue new stock when the stock price is perceived to be overvalued,and buy back own shares when there isundervaluation.Consequently,fluctuations in stock prices affect firms capital structures.There are two versions of equity market timing that lead to similar capital structure dynamics.The first assumes economic agents to be panies are assumed to issue equity directly after a positive information release which reduces the asymmetry problem between the firm’s management and stockholders.The decrease in information asymmetry coincides with an increase in the stock price.In response,firms create their own timing opportunities.The second theory assumes the economic agents to be irrational(Baker and Wurgler,2002).Due to irrational behaviour there is a time-varying mispricing of the stock of the company.Managers issue equity when they believe its cost is irrationally low and repurchase equity when they believe its cost is irrationally high.It is important to know that the second version of market timing does not require that the market actually be inefficient.It does not ask managers to successfully predict stock returns.The assumption is simply that managers believe that they can time the market.In a study by Graham and Harvey(2001),managers admited trying to time the equity market,and most of those that have considered issuing common stock report that"the amount by which our stock is undervalued or over-valued"was an important consideration.This study supports the assumption in the market timing theory mentioned above which is that managers believe they can time the market,but does not immediately distinguish between the mispricing and the dynamic asymmetric information version of market timing.Baker and Wurgler(2002)provide evidence that equity market timing has a persistent effect on the capital structure of the firm.They define a market timing measure,which is a weighted average of external capital needs over the past few years,where the weights used are market to book values of the firm.They find that leverage changes are strongly and positively related to their market timing measure,so they conclude that the capital structure of a firm is the cumulative outcome of past attempts to time the equity market.4.ConclusionsWhen regarding to a firm’s capital structure,the Modigliani-Miller theorem opened a literature on the fundamental nature of debt versus equity.The capital structure of a firm is the result of the transactions with various suppliers of finance.Inthe perfect capital markets world of Modigliani and Miller,the costs of different forms of financing do not vary independently and therefore there is no extra gain from opportunistically choosing among them.Nevertheless,financing clearly matters,and that as a consequence of taxes,differences in information and agency costs.The various theories of capital structure differ in their interpretation of these factors.Each emphasizes some cost and benefits of alternative financing strategies,so they are not designed to be general. According to the standard trade-off theory,taxes and bankruptcy account for the corporate use of debt.According to the standard pecking order theory,adverse selection accounts for the corporate use of debt.Both theories having weak parts,it is not surprising that there is active research on this matter.In the market timing theory,there is no optimal capital structure,so market timing decisions accumulate over time into the capital structure outcome.From this point of view,the market timing theory appears to have the most explanatory interest.资本结构理论的回顾1.介绍自从莫迪利亚尼和米勒（1958）发表了“资本结构无关论”，企业资本结构理论成为经济学家们长久以来的研究热点。
资本结构的计算方法
SIGNIFICANCE
OPTIMUM CAPITAL STRUCTURE If capital structure affects firm value there may be some optimal capital structure for the firm.
INVESTMENT APPRAISAL If capital structure affects the cost of capital then we may have to consider how a project is financed when evaluating it.
Fulthor plc is to be set up with a total capital of £10 million. Expected results for the company depend on trading conditions shown below:
Trading Conditions EBIT (£000) ROCE
4. The capital structure of the firm comprises equity and perpetual debt only.
MEASURES OF COST OF CAPITAL
Cost of equity (ke):
E/Ve
Cost of debt (kd):
I/Vd
IMPACT OF DEBT FINANCING
Debt appears cheaper than equity as a source of finance for firms: i. Lower risk for investors ii. Tax advantages iii. Lower transactions costs But debt is is a riskier source of finance for firms: i. Increases risk of financial distress ii. Increases volatility of returns to shareholders
Theory of the Firm Managerial Behavior,Agency Costs and Ownership Structure
Theory of the Firm: Managerial Behavior,Agency Costs and Ownership StructureMichael C. JensenHarvard Business SchoolMJensen@AndWilliam H. MecklingUniversity of RochesterAbstractThis paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the ‘separation and control’ issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.The directors of such [joint-stock] companies, however, being the managers rather of otherpeople’s money than of their own, it cannot well be expected, that they should watch over it withthe same anxious vigilance with which the partners in a private copartnery frequently watch overtheir own. Like the stewards of a rich man, they are apt to consider attention to small matters as notfor their master’s honour, and very easily give themselves a dispensation from having it.Negligence and profusion, therefore, must always prevail, more or less, in the management of theaffairs of such a company.— Adam Smith (1776) Keywords: Agency costs and theory, internal control systems, conflicts of interest, capital structure, internal equity, outside equity, demand for security analysis, completeness of markets, supply of claims, limited liability©1976 Jensen and MecklingJournal of Financial Economics, October, 1976, V. 3, No. 4, pp. 305-360.Reprinted in Michael C. Jensen, A Theory of the Firm: Governance,Residual Claims and Organizational Forms (Harvard University Press, December 2000)available at /catalog/JENTHF.htmlAlso published in Foundations of Organizational Strategy,Michael C. Jensen, Harvard University Press, 1998.You may redistribute this document freely, but please do not post the electronic file on the web. I welcome web links to this document at: /abstract=94043. I revise my papers regularly, and providing a link to the original ensures that readers will receive the most recent version. Thank you,Michael C. JensenTheory of the Firm: Managerial Behavior,Agency Costs and Ownership StructureMichael C. JensenHarvard Business SchoolandWilliam H. Meckling*University of Rochester1. Introduction1.1.Motivation of the PaperIn this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure1 for the firm. In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature including the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness of markets problems.1 We do not use the term ‘capital structure’ because that term usually denotes the relative quantities of bonds, equity, warrants, trade credit, etc., which represent the liabilities of a firm. Our theory implies there is another important dimension to this problem—namely the relative amount of ownership claims held by insiders (management) and outsiders (investors with no direct role in the management of the firm).* Associate Professor and Dean, respectively, Graduate School of Management, University of Rochester. An earlier version of this paper was presented at the Conference on Analysis and Ideology, Interlaken, Switzerland, June 1974, sponsored by the Center for Research in Government Policy and Business at the University of Rochester, Graduate School of Management. We are indebted to F. Black, E. Fama, R. Ibbotson, W. Klein, M. Rozeff, R. Weil, O. Williamson, an anonymous referee, and to our colleagues and members of the Finance Workshop at the University of Rochester for their comments and criticisms, in particular G. Benston, M. Canes, D. Henderson, K. Leffler, J. Long, C. Smith, R. Thompson, R. Watts, and J. Zimmerman.Our theory helps explain:1.why an entrepreneur or manager in a firm which has a mixed financial structure(containing both debt and outside equity claims) will choose a set of activities for the firm such that the total value of the firm is less than it would be if he were the sole owner and why this result is independent of whether the firm operates in monopolistic or competitive product or factor markets;2.why his failure to maximize the value of the firm is perfectly consistent withefficiency;3.why the sale of common stock is a viable source of capital even though managers donot literally maximize the value of the firm;4.why debt was relied upon as a source of capital before debt financing offered any taxadvantage relative to equity;5.why preferred stock would be issued;6.why accounting reports would be provided voluntarily to creditors and stockholders,and why independent auditors would be engaged by management to testify to the accuracy and correctness of such reports;7.why lenders often place restrictions on the activities of firms to whom they lend, andwhy firms would themselves be led to suggest the imposition of such restrictions;8.why some industries are characterized by owner-operated firms whose sole outsidesource of capital is borrowing;9.why highly regulated industries such as public utilities or banks will have higher debtequity ratios for equivalent levels of risk than the average nonregulated firm;10.why security analysis can be socially productive even if it does not increase portfolioreturns to investors.1.2Theory of the Firm: An Empty Box?While the literature of economics is replete with references to the “theory of the firm,”the material generally subsumed under that heading is not actually a theory of the firm but rather a theory of markets in which firms are important actors. The firm is a “black box” operated so as to meet the relevant marginal conditions with respect to inputs and outputs, thereby maximizing profits, or more accurately, present value. Except for a few recent and tentative steps, however, we have no theory which explains how the conflicting objectives of the individual participants are brought into equilibrium so as to yield this result. The limitations of this black box view of the firm have been cited by Adam Smith and Alfred Marshall, among others. More recently, popular and professional debates over the “social responsibility” of corporations, the separation of ownership and control, and the rash of reviews of the literature on the “theory of the firm” have evidenced continuing concern with these issues.2A number of major attempts have been made during recent years to construct a theory of the firm by substituting other models for profit or value maximization, with each attempt motivated by a conviction that the latter is inadequate to explain managerial behavior in large corporations.3 Some of these reformulation attempts have rejected the fundamental principle of maximizing2 Reviews of this literature are given by Peterson (1965), Alchian (1965, 1968), Machlup (1967), Shubik (1970), Cyert and Hedrick (1972), Branch (1973), Preston (1975).3 See Williamson (1964, 1970, 1975), Marris (1964), Baumol (1959), Penrose (1958), and Cyert and March (1963). Thorough reviews of these and other contributions are given by Machlup (1967) and Alchian (1965).Simon (1955) developed a model of human choice incorporating information (search) and computational costs which also has important implications for the behavior of managers. Unfortunately, Simon’s work has often been misinterpreted as a denial of maximizing behavior, and misused, especially in the marketing and behavioral science literature. His later use of the term “satisficing” (Simon, 1959) has undoubtedly contributed to this confusion because it suggests rejection of maximizing behavior rather than maximization subject to costs of information and of decision making.behavior as well as rejecting the more specific profit-maximizing model. We retain the notion of maximizing behavior on the part of all individuals in the analysis that follows.41.3Property RightsAn independent stream of research with important implications for the theory of the firm has been stimulated by the pioneering work of Coase, and extended by Alchian, Demsetz, and others.5 A comprehensive survey of this literature is given by Furubotn and Pejovich (1972). While the focus of this research has been “property rights”,6 the subject matter encompassed is far broader than that term suggests. What is important for the problems addressed here is that specification of individual rights determines how costs and rewards will be allocated among the participants in any organization. Since the specification of rights is generally affected through contracting (implicit as well as explicit), individual behavior in organizations, including the behavior of managers, will depend upon the nature of these contracts. We focus in this paper on the behavioral implications of the property rights specified in the contracts between the owners and managers of the firm.1.4Agency CostsMany problems associated with the inadequacy of the current theory of the firm can also be viewed as special cases of the theory of agency relationships in which there is a growing4 See Meckling (1976) for a discussion of the fundamental importance of the assumption of resourceful, evaluative, maximizing behavior on the part of individuals in the development of theory. Klein (1976) takes an approach similar to the one we embark on in this paper in his review of the theory of the firm and the law.5 See Coase (1937, 1959, 1960), Alchian (1965, 1968), Alchian and Kessel (1962), Demsetz (1967), Alchian and Demsetz (1972), Monson and Downs (1965), Silver and Auster (1969), and McManus (1975).6 Property rights are of course human rights, i.e., rights which are possessed by human beings. The introduction of the wholly false distinction between property rights and human rights in many policy discussions is surely one of the all time great semantic flimflams.literature.7 This literature has developed independently of the property rights literature even though the problems with which it is concerned are similar; the approaches are in fact highly complementary to each other.We define an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximizers, there is good reason to believe that the agent will not always act in the best interests of the principal. The principal can limit divergences from his interest by establishing appropriate incentives for the agent and by incurring monitoring costs designed to limit the aberrant activities of the agent. In addition in some situations it will pay the agent to expend resources (bonding costs) to guarantee that he will not take certain actions which would harm the principal or to ensure that the principal will be compensated if he does take such actions. However, it is generally impossible for the principal or the agent at zero cost to ensure that the agent will make optimal decisions from the principal’s viewpoint. In most agency relationships the principal and the agent will incur positive monitoring and bonding costs (non-pecuniary as well as pecuniary), and in addition there will be some divergence between the agent’s decisions8 and those decisions which would maximize the welfare of the principal. The dollar equivalent of the reduction in welfare experienced by the principal as a result of this divergence is also a cost of the agency relationship, and we refer to this latter cost as the “residual loss.” We define agency costs as the sum of:7 Cf. Berhold (1971), Ross (1973, 1974a), Wilson (1968, 1969), and Heckerman (1975).8 Given the optimal monitoring and bonding activities by the principal and agent.1.the monitoring expenditures by the principal,92.the bonding expenditures by the agent,3.the residual loss.Note also that agency costs arise in any situation involving cooperative effort (such as the co-authoring of this paper) by two or more people even though there is no clear-cut principal-agent relationship. Viewed in this light it is clear that our definition of agency costs and their importance to the theory of the firm bears a close relationship to the problem of shirking and monitoring of team production which Alchian and Demsetz (1972) raise in their paper on the theory of the firm.Since the relationship between the stockholders and the managers of a corporation fits the definition of a pure agency relationship, it should come as no surprise to discover that the issues associated with the “separation of ownership and control” in the modern diffuse ownership corporation are intimately associated with the general problem of agency. We show below that an explanation of why and how the agency costs generated by the corporate form are born leads to a theory of the ownership (or capital) structure of the firm.Before moving on, however, it is worthwhile to point out the generality of the agency problem. The problem of inducing an “agent” to behave as if he were maximizing the “principal’s” welfare is quite general. It exists in all organizations and in all cooperative efforts—at every level of management in firms,10 in universities, in mutual companies, in cooperatives, in9 As it is used in this paper the term monitoring includes more than just measuring or observing the behavior of the agent. It includes efforts on the part of the principal to ‘control’ the behavior of the agent through budget restrictions, compensation policies, operating rules, etc.10 As we show below the existence of positive monitoring and bonding costs will result in the manager of a corporation possessing control over some resources which he can allocate (within certain constraints) to satisfy his own preferences. However, to the extent that he must obtain the cooperation of others in order to carry out his tasks (such as divisional vice presidents) and to the extent that he cannot control their behavior perfectly and costlessly they will be able to appropriate some of these resources for their own ends. In short, there are agency costs generated at every level of the organization. Unfortunately, the analysis of these more general organizational issues is even more difficult than that of the ‘ownership andgovernmental authorities and bureaus, in unions, and in relationships normally classified as agency relationships such as those common in the performing arts and the market for real estate. The development of theories to explain the form which agency costs take in each of these situations (where the contractual relations differ significantly), and how and why they are born will lead to a rich theory of organizations which is now lacking in economics and the social sciences generally. We confine our attention in this paper to only a small part of this general problem—the analysis of agency costs generated by the contractual arrangements between the owners and top management of the corporation.Our approach to the agency problem here differs fundamentally from most of the existing literature. That literature focuses almost exclusively on the normative aspects of the agency relationship; that is, how to structure the contractual relation (including compensation incentives) between the principal and agent to provide appropriate incentives for the agent to make choices which will maximize the principal’s welfare, given that uncertainty and imperfect monitoring exist. We focus almost entirely on the positive aspects of the theory. That is, we assume individuals solve these normative problems, and given that only stocks and bonds can be issued as claims, we investigate the incentives faced by each of the parties and the elements entering into the determination of the equilibrium contractual form characterizing the relationship between the manager (i.e., agent) of the firm and the outside equity and debt holders (i.e., principals).1.5General Comments on the Definition of the firmRonald Coase in his seminal paper entitled “The Nature of the Firm” (1937) pointed out that economics had no positive theory to determine the bounds of the firm. He characterized thecontrol’ issue because the nature of the contractual obligations and rights of the parties are much more varied and generally not as well specified in explicit contractual arrangements. Nevertheless, they exist and we believe that extensions of our analysis in these directions show promise of producing insights into a viable theory of organization.bounds of the firm as that range of exchanges over which the market system was suppressed and where resource allocation was accomplished instead by authority and direction. He focused on the cost of using markets to effect contracts and exchanges and argued that activities would be included within the firm whenever the costs of using markets were greater than the costs of using direct authority. Alchian and Demsetz (1972) object to the notion that activities within the firm are governed by authority, and correctly emphasize the role of contracts as a vehicle for voluntary exchange. They emphasize the role of monitoring in situations in which there is joint input or team production.11 We are sympathetic to with the importance they attach to monitoring, but we believe the emphasis that Alchian and Demsetz place on joint input production is too narrow and therefore misleading. Contractual relations are the essence of the firm, not only with employees but with suppliers, customers, creditors, and so on. The problem of agency costs and monitoring exists for all of these contracts, independent of whether there is joint production in their sense; i.e., joint production can explain only a small fraction of the behavior of individuals associated with a firm.It is important to recognize that most organizations are simply legal fictions12 which serve as a nexus for a set of contracting relationships among individuals. This includes firms, non-profit institutions such as universities, hospitals, and foundations, mutual organizations such as mutual savings banks and insurance companies and co-operatives, some private clubs, and even governmental bodies such as cities, states, and the federal government, government enterprises such as TVA, the Post Office, transit systems, and so forth.11 They define the classical capitalist firm as a contractual organization of inputs in which there is ‘(a) joint input production, (b) several input owners, (c) one party who is common to all the contracts of the joint inputs, (d) who has rights to renegotiate any input’s contract independently of contracts with other input owners, (e) who holds the residual claim, and (f) who has the right to sell his contractual residual status.’12 By legal fiction we mean the artificial construct under the law which allows certain organizations to be treated as individuals.The private corporation or firm is simply one form of legal fiction which serves as a nexus for contracting relationships and which is also characterized by the existence of divisible residual claims on the assets and cash flows of the organization which can generally be sold without permission of the other contracting individuals. Although this definition of the firm has little substantive content, emphasizing the essential contractual nature of firms and other organizations focuses attention on a crucial set of questions—why particular sets of contractual relations arise for various types of organizations, what the consequences of these contractual relations are, and how they are affected by changes exogenous to the organization. Viewed this way, it makes little or no sense to try to distinguish those things that are “inside” the firm (or any other organization) from those things that are “outside” of it. There is in a very real sense only a multitude of complex relationships (i.e., contracts) between the legal fiction (the firm) and the owners of labor, material and capital inputs and the consumers of output.13Viewing the firm as the nexus of a set of contracting relationships among individuals also serves to make it clear that the personalization of the firm implied by asking questions such as “what should be the objective function of the firm?” or “does the firm have a social responsibility?” is seriously misleading. The firm is not an individual. It is a legal fiction which serves as a focus for a complex process in which the conflicting objectives of individuals (some of whom may “represent” other organizations) are brought into equilibrium within a framework of contractual relations. In this sense the “behavior” of the firm is like the behavior of a market, that is, the outcome of a complex equilibrium process. We seldom fall into the trap of characterizing13 For example, we ordinarily think of a product as leaving the firm at the time it is sold, but implicitly or explicitly such sales generally carry with them continuing contracts between the firm and the buyer. If the product does not perform as expected the buyer often can and does have a right to satisfaction. Explicit evidence that such implicit contracts do exist is the practice we occasionally observe of specific provision that ‘all sales are final.’the wheat or stock market as an individual, but we often make this error by thinking about organizations as if they were persons with motivations and intentions.141.6 Overview of the PaperWe develop our theory in stages. Sections 2 and 4 provide analyses of the agency costs of equity and debt respectively. These form the major foundation of the theory. In Section 3, we pose some questions regarding the existence of the corporate form of organization and examines the role of limited liability. Section 5 provides a synthesis of the basic concepts derived in sections 2-4 into a theory of the corporate ownership structure which takes account of the trade-offs available to the entrepreneur-manager between inside and outside equity and debt. Some qualifications and extensions of the analysis are discussed in section 6, and section 7 contains a brief summary and conclusions.2. The Agency Costs of Outside Equity2.1OverviewIn this section we analyze the effect of outside equity on agency costs by comparing the behavior of a manager when he owns 100 percent of the residual claims on a firm with his behavior when he sells off a portion of those claims to outsiders. If a wholly-owned firm is managed by the owner, he will make operating decisions that maximize his utility. These decisions14 This view of the firm points up the important role which the legal system and the law play in social organizations, especially, the organization of economic activity. Statutory laws sets bounds on the kinds of contracts into which individuals and organizations may enter without risking criminal prosecution. The police powers of the state are available and used to enforce performance of contracts or to enforce the collection of damages for non-performance. The courts adjudicate conflicts between contracting parties and establish precedents which form the body of common law. All of these government activities affect both the kinds of contracts executed and the extent to which contracting is relied upon. This in turn determines the usefulness, productivity, profitability and viability of various forms of organization. Moreover, new laws as well as court decisions often can and do change the rights of contracting parties ex post, and they can and do serve as a vehicle for redistribution of wealth. An analysis of some of the implications of these facts is contained in Jensen and Meckling (1978) and we shall not pursue them here.will involve not only the benefits he derives from pecuniary returns but also the utility generated by various non-pecuniary aspects of his entrepreneurial activities such as the physical appointments of the office, the attractiveness of the office staff, the level of employee discipline, the kind and amount of charitable contributions, personal relations (“friendship,” “respect,” and so on) with employees, a larger than optimal computer to play with, or purchase of production inputs from friends. The optimum mix (in the absence of taxes) of the various pecuniary and non-pecuniary benefits is achieved when the marginal utility derived from an additional dollar of expenditure (measured net of any productive effects) is equal for each non-pecuniary item and equal to the marginal utility derived from an additional dollar of after-tax purchasing power (wealth).If the owner-manager sells equity claims on the corporation which are identical to his own (i.e., which share proportionately in the profits of the firm and have limited liability), agency costs will be generated by the divergence between his interest and those of the outside shareholders, since he will then bear only a fraction of the costs of any non-pecuniary benefits he takes out in maximizing his own utility. If the manager owns only 95 percent of the stock, he will expend resources to the point where the marginal utility derived from a dollar’s expenditure of the firm’s resources on such items equals the marginal utility of an additional 95 cents in general purchasing power (i.e., his share of the wealth reduction) and not one dollar. Such activities, on his part, can be limited (but probably not eliminated) by the expenditure of resources on monitoring activities by the outside stockholders. But as we show below, the owner will bear the entire wealth effects of these expected costs so long as the equity market anticipates these effects. Prospective minority shareholders will realize that the owner-manager’s interests will diverge somewhat from theirs; hence the price which they will pay for shares will reflect the monitoring costs and the effect of the divergence between the manager’s interest and theirs. Nevertheless, ignoring for the moment the possibility of borrowing against his wealth, the owner will find it desirable to bear these costsas long as the welfare increment he experiences from converting his claims on the firm into general purchasing power15 is large enough to offset them.As the owner-manager’s fraction of the equity falls, his fractional claim on the outcomes falls and this will tend to encourage him to appropriate larger amounts of the corporate resources in the form of perquisites. This also makes it desirable for the minority shareholders to expend more resources in monitoring his behavior. Thus, the wealth costs to the owner of obtaining additional cash in the equity markets rise as his fractional ownership falls.We shall continue to characterize the agency conflict between the owner-manager and outside shareholders as deriving from the manager’s tendency to appropriate perquisites out of the firm’s resources for his own consumption. However, we do not mean to leave the impression that this is the only or even the most important source of conflict. Indeed, it is likely that the most important conflict arises from the fact that as the manager’s ownership claim falls, his incentive to devote significant effort to creative activities such as searching out new profitable ventures falls. He may in fact avoid such ventures simply because it requires too much trouble or effort on his part to manage or to learn about new technologies. Avoidance of these personal costs and the anxieties that go with them also represent a source of on-the-job utility to him and it can result in the value of the firm being substantially lower than it otherwise could be.2.2A Simple Formal Analysis of the Sources of Agency Costs of Equity and Who Bears ThemIn order to develop some structure for the analysis to follow we make two sets of assumptions. The first set (permanent assumptions) are those which will carry through almost all of the analysis in sections 2-5. The effects of relaxing some of these are discussed in section 6.15 For use in consumption, for the diversification of his wealth, or more importantly, for the financing of ‘profitable’ projects which he could not otherwise finance out of his personal wealth. We deal with these issues below after having developed some of the elementary analytical tools necessary to their solution.。
跨国资本结构与资本成本(英文版精品)Multinational Capital Structure and Cost of Capital
-isks are positively related to the market portfolio
- Decrease local firms’ capital costs by as much as 1 percent
Bekaert & Harvey, “Foreign Speculators and Emerging
Equity Markets,” Journal of Finance, 2000.
(a tendency to buy financial assets from the domestic market)
16-12
Project valuation & cost of capital
Approaches to project valuation - WACC = Weighted average cost of capital - APV = Adjusted present value
The weighted average cost of capital
Cost of capital (%)
Cost of equity capital iS
i = (B/V)i (1-T )+(S/V)i
WACC
B
C
S
Optimal range
After -tax cost of debt capital iB(1-TC)
16-10
Financial market integration
资本结构外文文献
Optimal Capital Structure: Reflections on economic and other valuesBy Marc Schauten & Jaap Spronk11. IntroductionDespite a vast literature on the capital structure 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 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 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 (see Shleifer & Vishney, 1997), receive a lion’s 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 maximization of the firm’s 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 maximization of the value of the shares for the current shareholders. Whenever other considerations than value maximization enter capital structure decisions, these considerations have to be instrumental to the goal of value maximization. The second case concerns the firm that explicitly chooses for more objectives than value maximization 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 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 value maximizing 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 structure decisions can be framed as multiple criteria decision problems which can then benefit from multiple criteria decision support tools that are now widely available.2. Maximizing shareholder valueAccording to the neoclassical view on the role of the firm, the firm has one single objective: maximization of 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 oneobjective in mind - wealth maximization - the goal of the firm is maximization of the firm's contribution to the financial wealth of its shareholders. 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 shareholder wealth maximization 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 view.The original 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 undervalued 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 equal.When corporate taxes 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 maximizes firm value 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 (G u ) and an identical levered firm (G l ) is the present value of tax shields (PVTS). Figure 1 depicts the total value of an unlevered and a levered firm7. The higher leverage, the lower G l , the higher G u - G l(=PVTS). In the traditional trade-off models of optimal capital structure it is assumed that firms balance the marginal present value of interest 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 of debt are the underinvestment problem (Myers, 1977)10, 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 'refusal 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 agency 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, Jensen (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 is an assumption of the traditional trade-off theory.In Myers' (1984) and Myers and Majluf's (1984) pecking order model12 there is no optimal capital structure. Instead, because of asymmetric information and signalling problems associated with external financing13, firm's financing policies follow a hierarchy, 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.) 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) focus 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 owner's interest to invest a greater fraction of his wealth in successful projects. Thus the owner's 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. (Copeland, Weston & Shastri, 2005.)The stakeholder theory formulated by Grinblatt & Titman (2002)15 suggests that the way in which a firm and its non-financial stakeholders interact is an important determinant of the firm's optimal capital structure. Non-financial stakeholders are those parties other than the debt and equity holders. Non-financial stakeholders include firm's customers, employees, suppliers and the overall community in which the firm operates. These stakeholders can be hurt by a firm's financial difficulties. For example customers may receive inferior products that are difficult to 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 firm's financial distress, non-financial stakeholders will be less interested ceteris paribus in doing business with a firm having a high(er) potential 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 their importance as determinant for the capital structure. This stakeholder theory could be seen as part of the trade-off theory (see Brealey, Myers and Allen, 2006, p.481, although the term 'stakeholder theory' is not mentioned) since these stakeholders influence the indirect costs of financial distress.16As the trade-off theory (excluding agency costs between managers and shareholders) and the pecking order theory, the stakeholder theory of Grinblatt and Titman (2002) assumes shareholder wealth maximization as the single corporate objective.17Based on these theories, a huge number of empirical studies have been produced. See e.g. Harris & Raviv (1991) for a systematic overview of this literature18. More recent studies are e.g. Shyum-Sunder & Myers (1999), testing the trade-off theory against the pecking order theory, Kemsley & Nissim (2002) estimating the present value of tax shield, Andrade & Kaplan (1998) estimating the costs of financial distress and Rajan & Zingales (1995) investigating the determinants of capital structure in the G-7 countries. Rajan & Zingales(1995)19 explain differences in leverage of individual firms with firm characteristics. In their study leverage is a function of tangibility of assets, market to book ratio, firm size and profitability. Barclay & Smith (1995) provide an empirical examination of the determinants of corporate debt maturity. Graham & Harvey (2001) survey 392 CFOs about a.o. capital structure. We come back to this Graham & Harvey study in Section 3.20Cross sectional studies as by Titman and Wessels (1988), Rajan & Zingales (1995) and Barclay & Smith (1995) and Wald (1999) model capital structure mainly in terms of leverage and then leverage as a function of different firm (and market) characteristics as suggested by capital structure theory21. We do the opposite. We do not analyze the effect of several firm characteristics on capital structure (c.q. leverage), but we analyze the effect of capital structure on variables that co-determine shareholder value. In several decisions, including capital structure decisions, these variables may get the role of decision criteria. Criteria which are related to the trade-off and pecking order theory are listed in Table 1. We will discuss these criteria in more detail in section 4. Figure 2 illustrates the basic idea of our approach.3. Other objectives and considerationsA lot of evidence suggests that managers act not only in the interest of the shareholders (see Myers, 2001). Neither the static trade-off theory nor the pecking order theory can fully explain differences in capital structure. Myers (2001, p.82) states that 'Yet even 40 years after the Modigliani and Miller research, our understanding of these firms22 financing choices is limited.' Results of several surveys (see Cools 1993, Graham & Harvey, 2001, Brounen et al., 2004) reveal that CFOs do not pay a lot of attention to variables relevant in these shareholder wealth maximizing theories. Given the results of empirical research, this does not come as a surprise.The survey by Graham and Harvey finds only moderate evidence for the trade-off theory. Around 70% have a flexible target or a somewhat tight target or range. Only 10% have a strict target ratio. Around 20% of the firms declare not to have an optimal or target debt-equity ratio at all.In general, the corporate tax advantage seems only moderately important in capital structure decisions. The tax advantage of debt is most important for large regulated and dividend paying firms. Further, favorable foreign tax treatment relative to the US is fairly important in issuing foreign debt decisions23. Little evidence is found that personal taxes influence the capital structure24. In general potential costs of financial distress seem not very important although credit ratings are. According to Graham and Harvey this last finding could be viewed as (an indirect) indication of concern with distress. Earnings volatility also seems to be a determinant of leverage, which is consistent with the prediction that firms reduce leverage when the probability of bankruptcy is high. Firms do not declare directly that (the present value of the expected) costs of financial distress are an important determinant of capital structure, although indirect evidence seems to exist. Graham and Harvey find little evidence that firms discipline managers by increasing leverage. Graham and Harvey explicitly note that ‘1) managers might be unwilling to admit to using debt in this manner, or 2) perhaps a low rating on this question reflects an unwillingness of firms to adopt Jensen’s solution more than a weakness in Jensen’s argument'.The most important issue affecting corporate debt decisions is management’s desire for financial flexibility (excess cash or preservation of debt capacity). Furthermore, managers arereluctant to issue common stock when they perceive the market is undervalued (most CFOs think their shares are undervalued). Because asymmetric information variables have no power to predict the issue of new debt or equity, Harvey and Graham conclude that the pecking order model is not the true model of the security choice25.The fact that neoclassical models do not (fully) explain financial behavior could be explained in several ways. First, it could be that managers do strive for creating shareholder value but at the same time also pay attention to variables other than the variables listed in Table 1. Variables of which managers think that they are (justifiably or not) relevant for creating shareholder value. Second, it could be that managers do not (only) serve the interest of the shareholders but of other stakeholders as well26. As a result, managers integrate variables that are relevant for them and or other stakeholders in the process of managing the firm's capital structure. The impact of these variables on the financing decision is not per definition negative for shareholder value. For example if ‘value of financial rewards for managers’ is one the goals that is maximized by managers – which may not be excluded – and if the rewards of managers consists of a large fraction of call options, managers could decide to increase leverage (and pay out an excess amount of cash, if any) to lever the volatility of the shares with an increase in the value of the options as a result. The increase of leverage could have a positive effect on shareholder wealth (e.g. the agency costs between equity and management could be lower) but the criterion 'value of financial rewards' could (but does not have to) be leading. Third, shareholders themselves do possibly have other goals than shareholder wealth creation alone. Fourth, managers rely on certain (different) rules of thumb or heuristics that do not harm shareholder value but can not be explained by neoclassical models either27. Fifth, the neoclassical models are not complete or not tested correctly (see e.g. Shyum-Sunder & Myers, 1999).Either way, we do expect variables other than those founded in the neoclassical property rights view are or should be included explicitly in the financing decision framework. To determine which variables should be included we probably need other views or theories of the firm than the neoclassical alone. Zingales (2000) argues that ‘…corporate finance theory, empirical research, practical implications, and policy recommendations are deeply rooted in an underlying theory of the firm.’ (Ibid., p. 1623.) Examples of attempts of new theories are 'the stakeholder theory of the firm' (see e.g. Donaldson and Preston, 1995), 'the enlightened stakeholder theory' as a response (see Jensen, 2001), 'the organizational theory' (see Myers, 1993, 2000, 2001) and the stakeholder equity model (see Soppe, 2006).We introduce an organizational balance sheet which is based on the organizational theory of Myers (1993). The intention is to offer a framework to enhance a discussion about criteria that could be relevant for the different stakeholders of the firm. In Myers' organizational theory employees (including managers) are included as stakeholders; we integrate other stakeholders as suppliers, customers and the community as well. Figure 3 presents the adjusted organizational balance sheet.Pre-tax value is the maximum value of the firm including the maximum value of the present value of all stakeholders' surplus. The present value of the stakeholders' surplus (ES plus OTS) is the present value of future costs of perks, overstaffing, above market prices for inputs (including above market wages), above market services provided to customers and the community etc.28 Depending on the theory of the firm, the pre-tax value can be distributedamong the different stakeholders following certain 'rules'. Note that what we call 'surplus' in this framework is still based on the 'property rights' principle of the firm. Second, only distributions in market values are reflected in this balance sheet. Neutral mutations are not29. Based on the results of Graham and Harvey (2001) and common sense we formulate a list of criteria or heuristics that could be integrated into the financing decision framework. Some criteria lead to neutral mutations others do not. We call these criteria 'quasi non-economic criteria'. Non-economic, because the criteria are not based on the neoclassical view. Quasi, because the relations with economic value are not always clear cut. We include criteria that lead to neutral mutations as well, because managers might have good reasons that we overlook or are relevant for other reasons than financial wealth.The broadest decision framework we propose in this paper is the one that includes both the economic and quasi non-economic variables. Figure 4 illustrates the idea. The additional quasi non-economic variables are listed in Table 2. This list is far from complete.flexibility could be relevant for at least employees and the suppliers of resources needed for these projects. As long as managers only would invest in zero net present value projects this variable would have no value effect in the organizational balance sheet. But if it influences the value of the sum of the projects undertaken this will be reflected in this balance sheet. Of course, financial flexibility is also valued for economic reasons, see Section 2 and 4.The probability of bankruptcy influences job security for employees and the duration of a 'profitable' relationship with the firm for suppliers, customers and possibly the community. For managers (and other stakeholders without diversified portfolios) the probability of default could be important. The cost of bankruptcy is for them possibly much higher than for shareholders with diversified portfolios. As with financial flexibility, the probability of default influences shareholder value as well. In Section 2 and 4 we discuss this variable in relation to shareholder value. Here the variable is relevant, because it has an effect on the wealth or other 'valued' variables of stakeholders other than equity (and debt) holders. We assume owner-managers dislike sharing control of their firms with others. For that reason, debt financing could possibly have non-economic advantages for these managers. After all, common stock carries voting rights while debt does not. Owner-managers might prefer debt over new equity to keep control over the firm. Control is relevant in the economic framework as well, see Section 2 and 4.In practice, earnings dilution is an important variable effecting the financing decision. Whether it is a neutral mutations variable or not30, the effect of the financing decision on the earnings per share is often of some importance. If a reduction in the earnings per share (EPS) is considered to be a bad signal, managers try to prevent such a reduction. Thus the effect on EPS becomes an economic variable. As long as it is a neutral mutation variable, or if it is relevant for other reasons we treat EPS as a quasi non-economic variable.The reward package could be relevant for employees. If the financing decision influences the value of this package this variable will be one of the relevant criteria for the manager. If it is possible to increase the value of this package, the influence on shareholder value is ceteris paribus negative. If the reward package motivates the manager to create extra shareholder value compared with the situation without the package, this would possibly more than offset this negative financing effect.优化资本结构：思考经济和其他价值By Marc Schauten & Jaap Spronk11。
外文翻译--资本结构、股权结构与公司绩效
外文文献：Capital structure, equity ownership and firm performanceDimitris Margaritis, Maria Psillaki 1Abstract：This paper investigates the relationship between capital structure, ownership structure and firm performance using a sample of French manufacturing firms. We employ non-parametric data envelopment analysis (DEA) methods to empirically construct the industry’s ‘best practice’frontier and measure firm efficiency as the distance from that frontier. Using these performance measures we examine if more efficient firms choose more or less debt in their capital structure. We summarize the contrasting effects of efficiency on capital structure in terms of two competing hypotheses: the efficiency-risk and franchise value hypotheses. Using quantile regressions we test the effect of efficiency on leverage and thus the empirical validity of the two competing hypotheses across different capital structure choices. We also test the direct relationship from leverage to efficiency stipulated by the Jensen and Meckling (1976) agency cost model. Throughout this analysis we consider the role of ownership structure and type on capital structure and firm performance.Firm performance, capital structure and ownershipConflicts of interest between owners-managers and outside shareholders as well as those between controlling and minority shareholders lie at the heart of the corporate governance literature (Berle and Means, 1932; Jensen and Meckling, 1976; Shleifer and Vishny, 1986). While there is a relatively large literature on the effects of ownership on firm performance (see for example, Morck et al., 1988; McConnell and Servaes, 1990; Himmelberg et al., 1999), the relationship between ownership structure and capital structure remains largely unexplored. On the other hand, a voluminous literature is devoted to capital structure and its effects on corporate performance –see the surveys by Harris and Raviv (1991) and Myers (2001). An emerging consensus that comes out of the corporate governance literature (see Mahrt-Smith, 2005) is that the interactions between capital structure and ownership structure impact on firm values. Yet theoretical arguments alone cannot unequivocally predict these relationships (see Morck et al., 1988) and the empirical evidence that we have often appears to be contradictory. In part these conflicting results arise from difficulties empirical researchers face in obtaining direct measures of the magnitude of agency costs that are not confounded by factors that are beyond the control of management (Berger and Bonaccorsi di Patti, 2006). In the remainder of this section we briefly review the literature in this area focusing on the main hypotheses of interest for this study.Firm performance and capital structureThe agency cost theory is premised on the idea that the interests of the company’s managers and its shareholders are not perfectly aligned. In their seminal paper Jensen and Meckling (1976) emphasized the importance of the agency costs of equity arising from the separation of ownership and control of firms whereby managers tend to maximize their own utility rather than the value of the firm. These conflicts may occur in situations where managers have incentives to take excessive risks as part of risk shifting investment strategies. This leads us to Jensen’s (1986) “free cash flow theory”where as stated by Jensen (1986, p. 323) “the problem is how to motivate managers to disgorge the cash rather than investing it below the cost of capital or wasting it on organizational inefficiencies.”Thus high debt ratios may be used as a disciplinary device to1来源：Journal of Banking & Finance , 2010 (34) : 621–632，本文翻译的是第二部分reduce managerial cash flow waste through the threat of liquidation (Grossman and Hart, 1982) or through pressure to generate cash flows to service debt (Jensen, 1986). In these situations, debt will have a positive effect on the value of the firm.Agency costs can also exist from conflicts between debt and equity investors. These conflicts arise when there is a risk of default. The risk of default may create what Myers (1977) referred to as an“underinvestment”or “debt overhang”problem. In this case, debt will have a negative effect on the value of the firm. Building on Myers (1977) and Jensen (1986), Stulz (1990) develops a model in which debt financing is shown to mitigate overinvestment problems but aggravate the underinvestment problem. The model predicts that debt can have both a positive and a negative effect on firm performance and presumably both effects are present in all firms. We allow for the presence of both effects in the empirical specification of the agency cost model. However we expect the impact of leverage to be negative overall. We summarize this in terms of our first testable hypothesis. According to the agency cost hypothesis (H1) higher leverage is expected to lower agency costs, reduce inefficiency and thereby lead to an improvement in firm’s performance.Reverse causality from firm performance to capital structureBut firm performance may also affect the choice of capital structure. Berger and Bonaccorsi di Patti (2006) stipulate that more efficient firms are more likely to earn a higher return for a given capital structure, and that higher returns can act as a buffer against portfolio risk so that more efficient firms are in a better position to substitute equity for debt in their capital structure. Hence under the efficiency-risk hypothesis (H2), more efficient firms choose higher leverage ratios because higher efficiency is expected to lower the costs of bankruptcy and financial distress. In essence, the efficiency-risk hypothesis is a spin-off of the trade-off theory of capital structure whereby differences in efficiency, all else equal, enable firms to fine tune their optimal capital structure.It is also possible that firms which expect to sustain high efficiency rates into the future will choose lower debt to equity ratios in an attempt to guard the economic rents or franchise value generated by these efficiencies from the threat of liquidation (see Demsetz, 1973; Berger and Bonaccorsi di Patti, 2006). Thus in addition to a equity for debt substitution effect, the relationship between efficiency and capital structure may also be characterized by the presence of an income effect. Under the franchise-value hypothesis (H2a) more efficient firms tend to hold extra equity capital and therefore, all else equal, choose lower leverage ratios to protect their future income or franchise value.Thus the efficiency-risk hypothesis (H2) and the franchise-value hypothesis (H2a) yield opposite predictions regarding the likely effects of firm efficiency on the choice of capital structure. Although we cannot identify the separate substitution and income effects our empirical analysis is able to determine which effect dominates the other across the spectrum of different capital structure choices.Ownership structure and the agency costs of debt and equity.The relationship between ownership structure and firm performance dates back to Berle and Means (1932) who argued that widely held corporations in the US, in which ownership of capital is dispersed among small shareholders and control is concentrated in the hands of insiders tend to underperform. Following from this, Jensen and Meckling (1976) develop more formally the classical owner-manager agency problem. They advocate that managerial share-ownership mayreduce managerial incentives to consume perquisites, expropriate shareholders’wealth or to engage in other sub-optimal activities and thus helps in aligning the interests of managers and shareholders which in turn lowers agency costs. Along similar lines, Shleifer and Vishny (1986) show that large external equity holders can mitigate agency conflicts because of their strong incentives to monitor and discipline management.In contrast Demsetz (1983) and Fama and Jensen (1983) point out that a rise in insider share-ownership stakes may also be associated with adverse ‘entrenchment’effects that can lead to an increase in managerial opportunism at the expense of outside investors. Whether firm value would be maximized in the presence of large controlling shareholders depends on the entrenchment effect (Claessens et al., 2002; Villalonga and Amit, 2006; Dow and McGuire, 2009). Several studies document either a direct (e.g., Shleifer and Vishny, 1986; Claessens et al., 2002; Hu and Zhou, 2008) or a non-monotonic (e.g., Morck et al., 1988; McConnell and Servaes, 1995; Davies et al., 2005) relationship between ownership structure and firm performance while others (e.g., Demsetz and Lehn, 1985; Himmelberg et al., 1999; Demsetz and Villalonga, 2001) find no relation between ownership concentration and firm performance.Family firms are a special class of large shareholders with unique incentive structures. For example, concerns over family and business reputation and firm survival would tend to mitigate the agency costs of outside debt and outside equity (Demsetz and Lehn, 1985; Anderson et al., 2003) although controlling family shareholders may still expropriate minority shareholders (Claessens et al., 2002; Villalonga and Amit, 2006). Several studies (e.g., Anderson and Reeb, 2003a; Villalonga and Amit, 2006; Maury, 2006; King and Santor, 2008) report that family firms especially those with large personal owners tend to outperform non-family firms. In addition, the empirical findings of Maury (2006) suggest that large controlling family ownership in Western Europe appears to benefit rather than harm minority shareholders. Thus we expect that the net effect of family ownership on firm performance will be positive.Large institutional investors may not, on the other hand, have incentives to monitor management (Villalonga and Amit, 2006) and they may even coerce with management (McConnell and Servaes, 1990; Claessens et al., 2002; Cornett et al., 2007). In addition, Shleifer and Vishny (1986) and La Porta et al. (2002) argue that equity concentration is more likely to have a positive effect on firm performance in situations where control by large equity holders may act as a substitute for legal protection in countries with weak investor protection and less developed capital markets where they also classify Continental Europe.We summarize the contrasting ownership effects of incentive alignment and entrenchment on firm performance in terms of two competing hypotheses. Under the ‘convergence-of-interest hypothesis’(H3) more concentrated ownership should have a positive effect on firm performance. And under the ownership entrenchment hypothesis (H3a) the effect of ownership concentration on firm performance is expected to be negative.The presence of ownership entrenchment and incentive alignment effects also has implications for the firm’s capital structure choice. We assess these effects empirically. As external blockholders have strong incentives to reduce managerial opportunism they may prefer to use debt as a governance mechanism to control management’s consumption of perquisites (Grossman and Hart, 1982). In that case firms with large external blockholdings are likely to have higher debt ratios at least up to the point where the risk of bankruptcy may induce them to lower debt. Family firms may also use higher debt levels to the extent that they are perceived to be less risky bydebtholders (Anderson et al., 2003). On the other hand the relation between leverage and insider share-ownership may be negative in situations where managerial blockholders choose lower debt to protect their non-diversifiable human capital and wealth invested in the firm (Friend and Lang, 1988). Brailsford et al. (2002) report a non-linear relationship between managerial share-ownership and leverage. At low levels of managerial ownership, agency conflicts necessitate the use of more debt but as managers become entrenched at high levels of managerial ownership they seek to reduce their risks and they use less debt. Anderson and Reeb (2003) find that insider ownership by managers or families has no effect on leverage while King and Santor (2008) report that both family firms and firms controlled by financial institutions carry more debt in their capital structure.外文翻译：资本结构、股权结构与公司绩效摘要：本文通过对法国制造业公司的抽样调查，研究资本结构、所有权结构和公司绩效的关系。
中外建筑史中英互译
• 西方宫殿
以单体建筑的宏伟豪华见长
• Western palace Grand grows perceptibly luxuriously by the monomer construction
二 中国宫殿
China Palace
• 朝代的更替 • 国力的盛衰 • 首都的迁移
Dynasty change National strength rise and fall
• 原因: 汉民族文化宽容，内向，保守 受外来文化影响不大但强烈影响了周边国家
Reasons: Han Chinese culture of tolerance, introverted, conservative, but not subject to external cultural influences strongly affect the neighboring countries
西方宫殿 Western Palace
• 古罗马帝国皇宫 Roman Empire Palace 罗马市中心 Rome city center 巴拉丁山 Palestinian Latin mountain
• 法国 巴黎 凡尔赛宫 (皇宫) • France Paris Versailles Palace (imperial palace)
始建于1661年
厅长76米，宽10米，高13 米。镜厅墙壁上镶有17面 巨大的镜子，每面镜子由 483块镜片组成，透过窗户 可以将凡尔赛宫后花园的 美景尽收眼底。 洛可可式建筑风格，于18 世纪20年代产生于法国， 在巴洛克建筑基础上发展 起来，主要表现在室内装 饰上
Rococo architectural style, produced in the 1720s in France, devel oped in the Baroque construction foundation, mainly displayed in the interior decoration
介绍长安三万里的英语作文
介绍长安三万里的英语作文English:"Longing for thousands of miles, the journey to Chang'an is filled with excitement and anticipation. From the bustling streets of the capital city to the serene mountains and rivers along the way, the scenery along the Silk Road is unparalleled. Rich in history and culture, Chang'an was the ancient capital of China and a melting pot of different civilizations. As travelers make their way through the legendary Chang'an Gate and along the impressive city walls, they can feel the weight of centuries of history and marvel at the architectural wonders of the past. With its grand temples, bustling markets, and lively streets, Chang'an truly embodies the essence of ancient China and leaves a lasting impression on all who visit."中文翻译:"千里迢迢的向往，通往长安的旅程充满了兴奋和期待。
长安三万里观后感英文加中文初中
长安三万里观后感英文加中文初中The ancient city of Chang'an, the capital of China during the Tang Dynasty, has long been a source of fascination and inspiration for scholars, artists, and travelers alike. As I embarked on a journey to explore this legendary city, I was struck by the rich tapestry of history, culture, and architectural marvels that unfolded before me. This essay serves as a reflection on my experience of traversing the three thousand miles of Chang'an, capturing the essence of this remarkable city through the lens of both English and Chinese perspectives.Stepping into the heart of Chang'an, I was immediately transported back in time, surrounded by the grandeur of towering pagodas, intricate temple complexes, and bustling marketplaces. The city's layout, with its grid-like streets and symmetrical design, spoke to the meticulous planning and engineering prowess of its ancient builders. As I wandered through the winding alleys and expansive boulevards, I couldn't help but marvel at the seamless integration of function and aesthetics that characterized the city's architecture.One of the most captivating aspects of Chang'an was its cultural diversity. The city was a melting pot of various ethnic groups, religions, and traditions, each contributing to the rich tapestry of its identity. The presence of Buddhist temples, Taoist shrines, and Islamic mosques side by side was a testament to the city's openness and tolerance. I found myself immersed in the sights, sounds, and aromas of this vibrant cultural mosaic, from the chanting of monks to the bustling markets selling exotic goods from across the Silk Road.As I delved deeper into the history of Chang'an, I was struck by the city's pivotal role in the development of Chinese civilization. It had served as the political, economic, and cultural center of the country for centuries, playing a crucial part in the spread of Chinese influence throughout the known world. The city's strategic location along the Silk Road facilitated the exchange of ideas, goods, and technologies, making it a hub of innovation and cross-cultural fertilization.One of the most remarkable aspects of Chang'an was its sheer scale and grandeur. The city's massive size, with its expansive walls and intricate network of streets and neighborhoods, was a testament to the ambition and organizational prowess of its rulers. The Tang Dynasty, in particular, was known for its commitment to urban planning and the development of infrastructure, and Chang'an was the crowning jewel of their achievements.As I explored the various landmarks and historical sites within the city, I was struck by the level of detail and craftsmanship that had gone into their construction. From the intricate carvings adorning the temple walls to the delicate calligraphy adorning the imperial buildings, every aspect of the city's architecture seemed to be imbued with a sense of artistry and cultural significance.One of the most poignant moments of my journey through Chang'an came when I visited the Daming Palace, the former imperial residence of the Tang Dynasty. Standing amidst the ruins of this once-magnificent structure, I couldn't help but feel a sense of melancholy and wonder. The grandeur of the past had given way to the ravages of time, yet the remnants of this lost world still held a powerful allure, inviting me to imagine the splendor and opulence that had once filled these halls.As I reflected on my experience in Chang'an, I was struck by the profound impact that this city had had on the course of Chinese history. It had served as a beacon of cultural and intellectual enlightenment, attracting scholars, artists, and thinkers from across the known world. The city's legacy continues to resonate today, inspiring a deep sense of pride and reverence among the Chinese people.在探索长安这座古老城市的过程中,我被其丰富的历史、文化和建筑奇迹所吸引。
推荐长安三万里的英语作文
推荐长安三万里的英语作文The Grandeur of Chang'an: A Captivating Journey Through China's Ancient CapitalChang'an, the ancient capital of China, has long been renowned for its grandeur and cultural significance. As the seat of power for numerous dynasties, this city has witnessed the rise and fall of empires, the flourishing of arts and literature, and the convergence of diverse traditions. In this essay, I will endeavor to capture the essence of Chang'an's allure and why it deserves to be experienced by travellers from around the world.Firstly, the sheer scale and architectural splendor of Chang'an are truly breathtaking. Spanning an area of over 84 square kilometers, the city was meticulously planned and designed to embody the principles of Chinese urban planning. The layout of Chang'an was a testament to the ingenuity of its designers, with a grid-like system of streets and avenues that facilitated efficient movement and transportation. The city's centerpiece, the Daming Palace, was a colossal complex that served as the imperial residence and administrative hub. Its intricate network of pavilions, gardens, and ceremonial halls showcased the pinnacle of Chinese palatialarchitecture.Beyond its physical grandeur, Chang'an was a vibrant hub of cultural and intellectual activity. As the capital of the Tang Dynasty, considered the golden age of Chinese civilization, the city attracted scholars, artists, and thinkers from across the empire and beyond. The renowned Chang'an Academy was a prestigious institution that fostered the development of literature, poetry, and the arts. Thecity's bustling markets and trade routes facilitated the exchange of goods, ideas, and cultural influences, making Chang'an a melting pot of diverse traditions.One of the most captivating aspects of Chang'an's history is its role as a gateway to the Silk Road. This ancient network of trade routes connected China to the West, facilitating the exchange of goods, technologies, and cultural practices. Merchants, diplomats, and travellers from as far as the Middle East and Europe would pass through Chang'an, leaving an indelible mark on the city's social and cultural fabric. The city's strategic location and thriving commercial activities made it a hub of international exchange, where cultures converged and ideas were born.The legacy of Chang'an's grandeur can still be felt in the present day. The city, now known as Xi'an, has carefully preserved and restored many of its historical sites, allowing visitors to immerse themselves inthe city's rich past. The Daming Palace, the City Wall, and the Terracotta Army are just a few of the iconic landmarks that continue to captivate and inspire visitors from around the world.In conclusion, the grandeur of Chang'an is a testament to the enduring spirit and ingenuity of the Chinese people. Its architectural marvels, cultural vibrancy, and historical significance make it a truly remarkable destination for travellers seeking to explore the depths of China's ancient heritage. Whether you are a history buff, an architecture enthusiast, or simply someone in search of a captivating cultural experience, Chang'an, or Xi'an, as it is known today, is a must-visit destination that will leave an indelible mark on your heart and mind.。
美丽长安的英文作文
美丽长安的英文作文Title: The Splendor of Chang'an。
Chang'an, the ancient capital of China, holds a timeless allure that captivates the hearts of those who wander its streets. With a history spanning over two millennia, Chang'an stands as a testament to the enduring legacy of Chinese civilization. Its name, which translates to "Eternal Peace," evokes a sense of tranquility that permeates every corner of this magnificent city.One cannot help but be enamored by the beauty of Chang'an's architecture. From the majestic palaces of the Tang Dynasty to the intricate pagodas of the Song Dynasty, each structure tells a story of craftsmanship and artistic excellence. The city's skyline is punctuated by the graceful curves of ancient rooftops, adorned with vibrant hues that speak of a bygone era.But Chang'an's allure extends beyond its architecturalsplendor. It is a city alive with the rhythm of daily life, where bustling markets and tranquil gardens coexist in harmony. Walking through the streets, one can witness the rich tapestry of Chinese culture unfolding before their eyes. From the sizzle of street vendors cooking savory snacks to the melodious strains of traditional music floating through the air, Chang'an is a feast for the senses.One cannot speak of Chang'an without mentioning itsrole as a center of learning and innovation. During the Tang Dynasty, the city was home to the famed Xianyang Palace, where scholars from across the empire gathered to exchange ideas and advance human knowledge. It was herethat the great minds of the time pondered the mysteries of the universe and laid the groundwork for many of the scientific and technological advancements that would shape the course of history.But perhaps what truly sets Chang'an apart is itsspirit of resilience. Throughout its long and storied history, the city has weathered countless storms, emergingstronger and more vibrant each time. From the ravages of war to the upheavals of political change, Chang'an has stood as a symbol of endurance and perseverance, a testament to the indomitable spirit of the Chinese people.In conclusion, Chang'an is more than just a city – it is a living testament to the rich tapestry of Chinese culture and history. From its magnificent architecture to its vibrant street life, from its role as a center of learning to its spirit of resilience, Chang'an continues to inspire awe and wonder in all who have the privilege of experiencing its beauty. Truly, it is a city worthy of its name – Eternal Peace.。
有关长安三万里的英语范文
有关长安三万里的英语范文Title: Exploring the Timeless Splendor of Chang'an, a Journey Through Three Thousand Li of HistoryChang'an, the ancient capital of China, now known asXi'an, is a city that has witnessed the ebb and flow of dynasties through its streets and alleys. The phrase"Chang'an Three Thousand Li" evokes images of a grandeur that once was, a bygone era where emperors ruled and scholars pondered. This essay delves into the rich tapestry of history, culture, and legacy that defines this storied metropolis, tracing its path through time and space to understand its enduring appeal.The origins of Chang'an can be traced back to the Zhou dynasty when it served as a secondary capital. However, itwas during the Tang dynasty that Chang'an reached its zenith, becoming one of the most populous and prosperous cities inthe world. The city was designed in a grid pattern with broad avenues and grand gates, reflecting the order and hierarchyof imperial rule. The famous Chang'an Avenue, running from north to south, was flanked by government offices, markets, and residences, while the Imperial City housed the palacesand gardens of the emperor.One of the most remarkable features of Chang'an was the Great Wild Goose Pagoda. Erected in the early Tang dynasty to house Buddhist scriptures brought from India, the pagoda stands as a testament to the city's religious and cultural diversity. It was during the Tang dynasty that Buddhism flourished, attracting scholars and pilgrims from across Asia. The Silk Road, connecting Chang'an to the West, facilitatednot only trade but also an exchange of ideas, art, and religions.The prosperity of Chang'an was reflected in its arts and literature. Poetry became a prominent form of expression,with poets like Li Bai and Du Fu immortalizing the city's beauty and complexity in their verses. Painting, calligraphy, music, and dance all thrived under the patronage of the court, producing works that are still revered today.As we move through the annals of history, we witness the decline and fall of the Tang dynasty, followed by periods of warfare and chaos. Yet, Chang'an persevered, undergoing transformations under subsequent dynasties. The Song, Yuan, Ming, and Qing dynasties each left their mark on the city, adapting its layout and architecture to suit their needs and tastes. Despite these changes, certain constants remained, such as the importance of education and scholarship. The Imperial College, established during the Han dynasty, continued to educate future officials and scholars for centuries.Fast forward to modern times, and Chang'an's legacy lives on through its successor, Xi'an. The city has embraced itspast while forging a new identity in the present. Xi'an's old city walls stand as a formidable barrier that has protected the city for over six centuries, offering visitors a chance to traverse its ramparts and view the city in its entirety. The Terracotta Army, discovered in 1974, has propelled Xi'an onto the global stage, showcasing the artistic achievements and ambitions of the first Qin Emperor.The Muslim Quarter in Xi'an is a bustling marketplacethat celebrates the city's ethnic diversity and culinary heritage. Here, one can taste the famous Roujiamo (meat sandwich), explore shops selling everything from spices to handicrafts, and witness the harmonious coexistence of different cultures.The Bell and Drum Towers, located at the heart of the old city, serve as reminders of the city's role as a cultural center. These towers were used for signaling the passage of time and for official ceremonies. Today, they offer panoramicviews of the city and host museums that provide insights into the region's history and customs.Xi'an's technological advancements are also evident, with the city becoming a hub for innovation and research. Universities and institutes are fostering the next generation of thinkers and entrepreneurs, ensuring that the spirit of inquiry and progress continues to thrive.In conclusion, the journey through three thousand li of Chang'an is one that transcends time and space. It is a narrative woven from the threads of imperial grandeur, cultural brilliance, and resilience through adversity. As we gaze upon the monuments and relics of this ancient capital, we are reminded of the enduring nature of human achievement and the capacity for societies to leave a lasting impact on the world. Xi'an, the modern-day embodiment of Chang'an, stands as a testament to the enduring legacy of a city that has been both a cradle of civilization and a beacon ofinnovation throughout the ages. Its story is one of humanity's greatest chapters, written in the stars above and etched into the earth below, inviting us to explore its depths and draw inspiration from its wisdom.。
长安三万里读后感英文版
长安三万里读后感英文版## English Response:"Chang'an at Night" by Li Bai is a masterpiece of Tang Dynasty poetry, renowned for its vivid imagery, intricate structure, and profound emotional depth. The poem captures the essence of the vibrant capital city of Chang'an under the cloak of night, inviting readers to immerse themselves in its mesmerizing sights and sounds.The opening line, "City of Chang'an, three miles wide," establishes the grand scale of the metropolis, a bustling hub of commerce and culture. The use of the number "three" evokes the concept of vastness and abundance, hinting at the myriad wonders that await those who venture into its depths.As the poem progresses, Li Bai paints a rich tapestry of sensory experiences. The "jade-like steps" and "golden tiles" gleam under the moonlight, casting an ethereal glowover the city. The "bright moon over the city wall" becomes a symbol of hope and renewal, illuminating the darknesswith its gentle radiance.Li Bai's use of personification breathes life into the city. The "painted eaves" speak of the artistry and craftsmanship that adorn the buildings, while the "fragrance of flowers" transports the reader to a realm of sensory delight. The "wind" whispers secrets to the traveler, carrying with it tales of the city's past and present.Through its intricate structure, the poem mirrors the complex tapestry of city life. The alternating lines offive and seven characters create a sense of rhythm and flow, echoing the ebb and flow of the metropolis. The use of contrasting images—light and darkness, noise and tranquility—highlights the duality of urban existence.Beyond its sensory and aesthetic appeal, "Chang'an at Night" also conveys a deeper philosophical message. The poem invites readers to reflect on the transience of timeand the ephemeral nature of human existence. The "moonlight" symbolizes the fleeting nature of beauty andthe cyclical passing of days into nights.Overall, "Chang'an at Night" is a timeless masterpiece that transports readers to the vibrant heart of ancient China. Through its exquisite imagery, intricate structure, and profound philosophical insights, the poem captures the essence of a city that was once the cultural and political center of the world.## 中文回答：李白的《长安三万里》是唐代诗歌的代表作，以其鲜明的意象、精巧的结构和深沉的情感著称。
推荐电影长安三万里及理由的英语作文
推荐电影长安三万里及理由的英语作文The Best Movie Ever: The Long Journey HomeHave you ever seen a movie that was so exciting, you couldn't stop thinking about it for days? A movie that made you laugh, cry, and feel like you were right there on the adventure? Well, that's exactly how I felt after watching the amazing film The Long Journey Home!The Long Journey Home is a story about a young boy named Little Bao who lives in ancient China during the Tang Dynasty. His village is poor, and his family doesn't have much money. But Little Bao has big dreams – he wants to travel all the way to the capital city of Chang'an to take the prestigious imperial examination and become a scholar-official working for the emperor.The only problem is that Chang'an is over 3,000 miles away from Little Bao's village! That's like walking from New York to California and back again. And the journey is incredibly dangerous, with bandits, wild animals, and harsh environments along the way. But Little Bao is determined, so he packs a bag and sets off on the long journey home (to Chang'an) with just a compass and a map.I couldn't believe how brave Little Bao was! At just 10 years old, he was doing something that most adults would never dare to try. I was on the edge of my seat the whole time, wondering if he would make it safely or get captured by bandits. There were so many close calls and heart-pounding moments of danger.Along the way, Little Bao meets all sorts of interesting characters who either try to help him or get in his way. My favorite was the mischievous monkey spirit who acts as Little Bao's sidekick and gets him into trouble sometimes. The monkey was so funny and made me laugh a lot. Little Bao also befriends a group of traveling martial arts students, and they teach him cool fighting moves to defend himself.But the journey is incredibly difficult. Little Bao has to cross scorching hot deserts, freezing cold mountains, raging rivers, and dense jungles full of ferocious animals. At times, I didn't think he would survive. I felt so bad for him when he was cold, hungry, and exhausted but still pushed himself to keep going. His determination was really inspiring.What I loved most about the movie though was the rich culture, spectacular scenery, and dazzling action sequences. The scenes of Chang'an were breathtaking, with colorful lanterns, crowded markets, and the grand imperial palace. And the martialarts fighting was choreographed so beautifully, withgravity-defying leaps and incredible stunts.My favorite scene was when Little Bao was cornered by bandits inside an ancient temple ruin, only for dozens of huge stone warrior statues to come to life and engage in an epic battle against the villains. It was jaw-droppingly awesome! The special effects made me feel like I was really there amidst the cinematic action.In the end, Little Bao does finally make it to Chang'an after overcoming every obstacle. And in a thrilling climax, he gets the chance to take the examination and show off his courage, quick-wits, and immense knowledge to the emperor himself. I was on the edge of my seat, cheering him on. I won't spoil whether he passes or not, but I can say the ending had me in happy tears.The Long Journey Home isn't just a fun action/adventure movie though. It also teaches valuable lessons about perseverance, courage, humility, and holding onto your dreams no matter how impossible they may seem. Little Bao is such an inspiring role model for kids with his intelligence, resourcefulness, and determination to never give up on his goals despite all the hardships he faces.I also really appreciated how the movie highlighted the customs, philosophies, and rich ancient culture of China during the Tang Dynasty golden age. I learned so much about things like Buddhism, Confucianism, traditional chinese clothing, architecture, calligraphy, and more. The dragon dance festival scenes were dazzling!Overall, I can't recommend The Long Journey Home enough! It has something for everyone - humor, heart, inspiration, thrilling action, and a kid hero you can't help but root for. The movie's messages about perseverance and cultural traditions really stuck with me.I've probably already watched it 10 times, and I know I'll keep watching it over and over again. It's my new all-time favorite film! You have to see this movie. Huddle your family around the TV, make some popcorn, and get ready for an adventure you'll never forget. The Long Journey Home is an instant classic in my book!。
长安三万里观后感英文加中文初中
长安三万里观后感英文加中文初中English:"Having watched the movie "Long Live the King" ( "Chang'an 3000 Miles"), I am deeply impressed by the grandeur and complexity of ancient China, as portrayed in the film. The recreation of the Tang Dynasty's capital city, Chang'an, with its bustling streets, colorful markets, and majestic palaces, truly brings to life the magnificence of this ancient civilization. The intricate political struggles and personal conflicts depicted in the movie also shed light on the challenges and ambitions of individuals living in that era. I was particularly moved by the protagonist's determination to bring about positive changes despite facing numerous obstacles and injustices. Overall, the film's compelling storytelling and impressive visual effects make it a memorable and thought-provoking cinematic experience."中文翻译:"在观看了电影《长安三万里》之后，我对电影中展现的古代中国的雄伟与复杂深感印象深刻。
穿越时间的旅程发现中国历史的奇迹英语作文
穿越时间的旅程发现中国历史的奇迹英语作文全文共6篇示例，供读者参考篇1Title: A Journey through Time: Discovering the Miracles of Chinese HistoryHi everyone! Today, I want to tell you about the amazing adventure I had when I traveled back in time to discover the incredible wonders of Chinese history. It all started when I stepped into a magical time machine and zoomed back thousands of years into the past. I was so excited to learn about all the cool things that happened in ancient China!First, I visited the Great Wall of China, which was built over 2,000 years ago to protect the country from invaders. As I walked along the massive wall and looked out at the breathtaking views, I couldn't believe the hard work and determination it took to construct such a remarkable structure. It was truly a marvel of human engineering!Next, I traveled to the Forbidden City in Beijing, where I wandered through the ancient palace and marveled at the beautiful architecture and intricate designs. I imagined what lifemust have been like for emperors and empresses who once lived there, surrounded by luxury and elegance. It was like stepping into a fairy tale!I also had the chance to explore the Terracotta Army in Xi'an, where thousands of life-sized clay soldiers were buried to protect the tomb of China's first emperor. The sight of the statues standing guard in formation was both awe-inspiring and a little bit spooky. I felt like I was walking among ancient warriors frozen in time.As my journey through time continued, I learned about the invention of paper, the Silk Road trade route, and the art of Chinese calligraphy. I even got to taste delicious traditional foods like dumplings, noodles, and tea. It was a feast for the senses!I was amazed by all the incredible things I discovered during my time-traveling adventure in China. From the wonders of the past to the beauty of the present, Chinese history is full of amazing stories and surprises. I can't wait to go back and explore even more of this fascinating country!So, if you ever get the chance to travel through time and discover the wonders of Chinese history, don't hesitate to jumpon board! You won't be disappointed. Trust me, it's a journey you'll never forget!篇2Title：Discovering the Miracles of Chinese History on a Journey Through TimeHey guys! Have you ever wondered what it would be like to travel back in time and see all the cool things that happened in history? Well, I recently went on a super awesome journey through time and discovered some of the most incredible miracles of Chinese history. Let me tell you all about it!First, I traveled all the way back to ancient China, a time when emperors ruled the land and warriors fought epic battles. I visited the Great Wall of China, a gigantic wall that stretches for thousands of miles. It was so amazing to see how it was built to keep out invaders and protect the Chinese people. I also met a famous warrior named Mulan, who disguised herself as a man to fight for her country. She was so brave and strong!Next, I traveled to the Han Dynasty, a time of great inventions and discoveries. I saw the Terracotta Army, a massive collection of clay soldiers that were buried with an emperor to protect him in the afterlife. It was like nothing I had ever seenbefore! I also learned about papermaking, which was invented by the Chinese during this time. Can you believe that we use paper every day because of them?Then, I journeyed to the Tang Dynasty, a time of art and culture. I visited the Silk Road, a trading route that connected China to the rest of the world. I saw beautiful silk robes and pottery from faraway lands. I also met the famous poet Li Bai, who wrote beautiful poems about nature and love. He even recited one for me!Finally, I traveled to modern China, a time of rapid development and progress. I saw the futuristic skyscrapers of Shanghai and the ancient temples of Beijing. I learned about the Chinese New Year, a festival of fireworks and dragon dances. I even got to try delicious Chinese food like dumplings and noodles. Yum!Overall, my journey through time was an incredible experience. I discovered so many amazing things about Chinese history and culture. I can't wait to go on another adventure and see what other miracles await me. Who knows, maybe next time I'll travel to ancient Egypt or medieval Europe. The possibilities are endless!So, what do you think, guys? Would you like to go on a journey through time and discover the miracles of history? Let me know in the comments below! Until next time, bye!篇3Once upon a time, I went on a time-traveling journey and discovered some amazing wonders of Chinese history. It was so cool!First, I traveled back to the time of the Qin Dynasty. I saw the Great Wall being built by thousands of people using giant bricks and stones. It was like a huge puzzle being put together to protect the kingdom from invaders. I even got to help out by carrying a tiny brick so I could say I helped build the Great Wall!Next, I zoomed forward to the Tang Dynasty and saw the beautiful Tang poetry being written by famous poets like Li Bai and Du Fu. Their words were so beautiful and the poems were full of emotion and meaning. I tried writing my own poem about my time-traveling adventure, but it wasn't as good as theirs.After that, I skipped ahead to the Ming Dynasty and witnessed the creation of the stunning porcelain vases and dishes. The craftsmen carefully painted intricate designs on each piece, making them look like works of art. I even got to try myhand at painting, but ended up with a big mess of colors on my hands instead.Finally, I traveled to modern-day China and marveled at the high-speed trains and skyscrapers in the bustling cities. It was amazing to see how much China has changed over the centuries, yet still managed to hold on to its rich history and culture.Overall, my journey through time was a whirlwind of exciting discoveries and adventures. I learned so much about China's past and the incredible achievements of its people. It was a trip I will never forget!篇4Once upon a time, there was a group of curious friends who decided to embark on a journey through time to discover the wonders of Chinese history. Armed with their trusty time machine, they set off on a thrilling adventure that would take them to the heart of ancient China.Their first stop was the majestic Great Wall of China, a marvel of ancient engineering that stretched across the northern border of the country. As they walked along the ancient stones, they imagined the countless workers who had toiled for years to build this incredible structure to protect their land from invasion.Next, they traveled to the bustling streets of the Tang Dynasty capital city of Chang'an, where they marveled at the grand palaces and temples that once stood there. They watched as merchants haggled over goods in the busy markets, and listened to the beautiful music of the court musicians.Their journey took them to the vast terracotta army of Emperor Qin Shi Huang, where they were awestruck by the thousands of life-sized statues that stood guard over the emperor's tomb. They imagined the skilled craftsmen who had labored for years to create these incredible works of art.As they traveled through time, the friends learned about the rich cultural heritage of China - from the elegant poetry of the Song Dynasty to the intricate silk embroidery of the Ming Dynasty. They marveled at the beautiful calligraphy and traditional paintings that graced the walls of ancient palaces and temples.Finally, as their journey came to an end, the friends realized the true significance of their adventure. They had not just traveled through time, but had also gained a deeper understanding and appreciation of China's rich and diverse history. And as they returned to their own time, they knew that their memories of their journey would stay with them forever.And so, the group of friends bid farewell to the wonders of Chinese history, grateful for the opportunity to have experienced such an incredible journey through time. And as they stepped out of the time machine and back into the present day, they knew that they would always cherish the memories of their time traveling through China's remarkable past.篇5One day, me and my friends jumped into a time machine and went on a journey through history to discover the miracles of China. It was so exciting!First, we traveled back to the time of the Terracotta Warriors in Xi'an. We saw thousands of clay soldiers and horses standing tall, guarding the tomb of Emperor Qin Shi Huang. It was like stepping into a movie!Next, we zipped over to the Great Wall of China. We climbed up the ancient stones and marveled at the breathtaking views. We learned how the wall was built over 2,000 years ago to protect China from invaders. It was incredible to see it in person!Then, we visited the Forbidden City in Beijing. The colorful palaces and intricate designs took our breath away. We imaginedwhat life was like for emperors and empresses living in such grandeur. It felt like we were in a fairy tale!After that, we hopped over to the Terraces of rice fields in Yuanyang. The green and yellow patterns stretched out for miles, creating a beautiful mosaic. We learned how farmers have been growing rice here for centuries. It was fascinating to see how nature and humans work together.Finally, we ended our journey in the modern city of Shanghai. The towering skyscrapers and bustling streets showed us how China has grown and changed over the years. It was amazing to see the mix of ancient traditions and modern technology in one place.As we traveled back home in our time machine, we couldn't stop talking about all the incredible things we saw in China. It was a journey we would never forget, and we couldn't wait to tell our classmates all about it. Discovering the wonders of Chinese history was truly a magical experience!篇6Title: Journey Through Time: Discovering the Wonders of Chinese HistoryHi everyone! Today, I'm going to tell you all about my amazing adventure through time to discover the wonders of Chinese history. It all started when I found a magical time machine in my backyard. I climbed inside, pressed a few buttons, and off I went on a whirlwind journey through the centuries.First stop, the ancient Shang dynasty! I saw beautiful bronze vessels and learned about the mysterious oracle bones. It was like stepping into a time machine and traveling back thousands of years. Next, I visited the Qin dynasty, where I marveled at the incredible Terracotta Army. It was so cool to see all thoselife-sized statues of warriors and horses.As my journey continued, I traveled to the Han dynasty and learned about the famous Silk Road. I imagined myself riding a camel through the desert, trading silk and spices with merchants from faraway lands. Then, I visited the Tang dynasty and saw the magnificent Buddhist sculptures at the Longmen Grottoes. They were so huge and detailed, it was hard to believe they were carved by hand so long ago.I also explored the Song dynasty, where I discovered the amazing inventions like the movable type printing press and the compass. It was incredible to see how these inventions changed the world and paved the way for modern technology. Finally, Itraveled to the Ming dynasty and visited the majestic Forbidden City in Beijing. The grand palaces and beautiful gardens took my breath away.After my journey through time, I realized just how rich and fascinating Chinese history is. I learned about emperors and dynasties, inventions and discoveries, and the rich culture and traditions that have been passed down through the ages. It was a truly unforgettable experience that I will treasure forever.So, if you ever get the chance to travel through time, make sure to visit China and explore its incredible history. You won't be disappointed! Thanks for listening to my story, and remember, the past is just a time machine ride away!。
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firm value and security value invariance propositions can fail under corporate and personal taxation (or bankruptcy costs) and under incomplete protective covenants, respectively, In short, various currently held theories make very different predictions as to the relationships between capital structure and the valuation of the firm and its individual securities. Classic microeconomic theory presumes that firms act solely to maximize securityholders’ wealth or firm net present value. But Jensen-Meckling’s (1976) careful exploration of the agency relationships of corporate organization suggests that incentive conflicts can motivate maximization of stockholder wealth or management wealth at the expense of firm value maximization. In a similar vein, Bulow-Shoven (1978) analyze situations where management is induced to maximize wealth of debtholders. Thus, the existence of incentive conflicts provides a variety of motivations for capital structure changes. This study tests the predictions of many of the currently held theories by analyzing the effects which particular capital structure changes have on the market prices of the firms’ securities. Other studies have not controlled for asset structure changes which occur at the time of capital structure changes.’ This study avoids this problem by analyzing two instances where corporate financial decisions result in close approximations to pure capital structure changes: intrafirm exchange offers and recapitalizations. These two events are unique in that they do not entail any firm cash inflows or outflows (with the exception of expenses) while they cause major changes in the firm’s capital structure. These changes are effected through a private exchange between the firm and one or more classes of its securityholders. Section 2 reviews the current theories of optimal capital structure and sets forth the predicted price adjustments for major security classes according to the type of exchange offer announced. Section 3 describes the exchange offer process and the related data sample. Section 4 introduces a new methodology for testing the significance of exchange offer announcements on the portfolio rates of return of the firms’ common stock. preferred stock. and debt. Section 5 presents portfolio daily returns surrounding tender Corporate finance theory has not yet determined the consequences of fragmenting a firm’s probability distribution of future market value into classes of securities. Modigliani- Miller (1958) demonstrate that when production-investment decisions are held fixed. the value of a firm is invariant to the composition of its capital structure given a perfect capital market (frictionless and perfectly competitive) and no taxes.’ Fama-Miller (1972. pp. 167-170) further demonstrate that under the added condition of complete protective covenants or ‘me-first rules’ the values of a firm’s individual securities are invariant to capital structure changes. However, the
,Journal
of Financial
Economics
8 (1980) 139-178.
0 North-Holland
Publishing
Company
THE
EFFECTS OF CAPITAL STRUCTURE ON SECURITY PRICES A Study of Exchange Offers Ronald
Uttirwsit) oj Califomiu,
CHANGE
W. MASULIS*
Loa Angeles,
C.4 90024. liSA February 1980
Received
March
1979, final version
received
Thus study considers the impact of capnal structure change announcements on securrty prices. stock, preferred stock and debt Statrstically srgnificant price adjustments m firms’ common related to these announcements are documented and alternatlv,e causes for these price changes are examined. The evidence is consistent with both corporate tax and wealth redistrrbutron effects, There IS also evidence that firms make decisions which do not maxrmrze stockholder wealth. In additron, a new approach to testmg the sigmticance of publrc announcements on security returns IS presented.
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*This is based on my Ph.D. disscrtatron wrrtten at the Universrty of Chicago. I would like to thank my committee ~ Nicholas Gonedes, Albert Madansky. Merton Miller. Harry Roberts, Myron Scholes, and especially my chanman, Robert Hamada -~ for therr help and encouragement. I have also benefitted from the suggestions of Walter Blum, Stephen Brown. Paul Cootner, Harry DeAngelo, Lawrence Fisher, George Foster, Michael Jensen, Roger Ibbotson, John Long, David Mayers, Wayne Mikkelson, Clifford Smith, G. William Schwert. the referee, Richard Ruback, and the participants in the finance workshops at Chicago, Rochester. UCLA and elsewhere. This study was partially supported by the Center for Research in Securrty Prices at the University of Chicago. The author takes full responsibility for remaining errors. ‘In this proof, Modigliani-Miller assumed that the firm’s debt was riskless. However, this was later shown to be only a simplifying assumption; see Fama-Miller for risky debt wrth perfect me-first rules and Fama (1978) for risky debt without perfect me-first rules.