Optimal capital structure for construction coompanies-a profitability viewpoint

• Main Authors: Chun-chiang Hsu, 許竣強
• Other Authors: Jieh-Haur Chen
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/77643834839323854863

碩士 === 國立中央大學 === 營建管理研究所 === 98 === The optimal capital structure for a corporation has been discussed for years; yet, numerous studies proposed certain values of debt ratio, which barely fit empirical evidence for construction and construction related companies. This research adopts the profitability viewpoint and modifies the trade off model to establish a theoretical corporate capital structure more suitable for construction and construction related companies. Having technology impact set to a constant and adjusting the equations by characteristics of the construction industry, the modified capital structure model is established. The model is evaluated using 260 ranked empirical datasets by the Technique for Order Performance by Similarity to Ideal Solution (TOPSIS), and demonstrates that the debt ratio at 52.29% is optimal. The findings address that a gap of 5.67% in average between the theoretical value and empirical value is limited; thus, the optimal capital structure exists. With the consideration of corporate profitability, this research suggests that the range of practical capital structure from 43.28% to 61.31% is more suitable for construction and construction related companies.