Risk conversion of debt financing in the coal company

Debt financing is one of the principle factors in capital structure of a firm, which is important to ensure operating capital and improve value of the firm. By now, measuring methods of debt financing have focused on computation of deviation between the real earnings and expected profits. It has been known that the key to avoid “two-side” of debt financing is to utilize low cost of debt capital effectively and eliminate risk, as well as seek for the dynamic balance point (or balance interval). So in hypothesis of effective market, decision to deal with risk of debt financing has been conversed into realizing the maximizing value of the company. Research on maximization value of the company has focused on making the optimum capital structure. The multiple linear regression method has been applied and accounting data of the listed coal companies in China have been collected further. The micro influence factors and dynamic model of capital structure in the listed coal companies in China have been presented.