A Research on Debt Financing Effects Based on the Power Companies

Abstract

Through the statistical analysis of 51 electric power listed company, this paper shows the specific industry characteristics in electric power listed company, and makes detailed study on the electric power listed company's effect, tax shield effect and corporate governance effect of debt financing, then use empirical method to prove them. The empirical results show that, for the electric power listed company with good profitability, increasing asset-liability ratio, its debt effect of financing can be improved, vice versa. The paper also shows the size and growth of company have positive correlation with debt financing, which has negative correlation with extent of stock concentration.