|
Abstract: |
Firms’ capital structure choices not only affect their tax shield benefits and financial distress costs, but also affect the harmony between firms and their stakeholders. Although more debts can increase firms’ tax shield benefits, it can also tense up the relationships between firms and their stakeholders such as employees, customers, suppliers and creditors. These could further affect firms’ future sustainable development. Based on the above considerations, firms should reduce their debt ratio accordingly to achieve long-term harmonious development when choosing their capital structure.
|