The joint determination of capital structure and investment risk is examined. Optimal capital structure re ects both the tax advantages of debt less default costs (Modigliani-Miller), and the agency costs resulting from asset substitution (Jensen-Meckling). Agency costs restrict leverage and debt maturity and increase yield spreads, but their importance is relatively small for the range of envi...

This paper examined the non-tradable share reform affects ownership structure and figure out how the mechanism relationship between two types of equity agency cost changes. In order to achieve the result, data from listed company is used to analyze the changes of relationship between ownership structure and equity agency cost after non-tradable share reform. The results of the research show non...