Relationship Between Corporate Capital Structure and Company Value   — Based on the CAPM and APT model and the WACC analysis

Junhui Liao

doi:10.54254/2754-1169/19/20230125

Research Article

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Published on 13 September 2023

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Liao,J. (2023). Relationship Between Corporate Capital Structure and Company Value — Based on the CAPM and APT model and the WACC analysis. Advances in Economics, Management and Political Sciences,19,107-117.

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Relationship Between Corporate Capital Structure and Company Value — Based on the CAPM and APT model and the WACC analysis

Junhui Liao *^,1,

¹ John F.Kennedy Catholic Preparatory School

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/19/20230125

Abstract

The core of financial management and investment activities is to maximize the wealth of the company and shareholders. Company value maximization is inseparable from shareholder value maximization. Due to the fact that the structure of company's capital would influence the level of profit return and the circumstance of cash flow, the management for financial framework is a significant connection between the economic situation of the corporation, by which it can benefit the value. The author briefly analyzed the CAPM since it is not an accurate model, which has unrealistic assumptions and the disadvantages of unrest, by using the APT model to replace the CAPM model to study the arbitrage pricing model and its relationship with the capital asset pricing model (CAPM). From the analysis of these models and the introduction of four capital structure theories, the connection between corporation capital structure and corporate value is further studied.

Keywords

capital structure, M & M theory, WACC, CAPM, APT

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About volume

Volume title: Proceedings of the 2023 International Conference on Management Research and Economic Development

Conference website: https://2023.icmred.org/

ISBN：978-1-915371-81-2(Print) / 978-1-915371-82-9(Online)

Conference date: 28 April 2023

Editor：Javier Cifuentes-Faura, Canh Thien Dang

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.19

ISSN：2754-1169(Print) / 2754-1177(Online)

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