房地产投资信托的资金结构外文翻译（已处理）房地产投资信托的资金结构外文翻译本科毕业论文(设计)外文翻译原文:On the Capital Structure of Real Estate Investment TrustsIn general, the received theory on capital structure can be categorized into two broad classes, one of optimization where managers trade off the costs against the benefits of debt, and the other behavioral where managerial decision making is influenced by market’s perception of managers’ superior information, and the overall condition of the market which may occasionally present windows of opportunity to sell securities at a premium Optimization of the Costs and Benefits of Debt?Tradeoff TheoryTradeoff theory posits that a target debt ratio exists which is determined by the tradeoff between the costs and benefits of debt, with the fi rm’s assets and investment plans held constant. The most significant benefit of debt financing is the interest tax shield. Mandatory interest payment also reduces free cash flow which mitigates the agency conflict between security-holders and managers. Since profitable firms have higher income to shield, and greater free cash flow,theory predicts higher leverage for profitable firms, and the opposite for firms with investment opportunities that are perceived to be risky. The cost of financial distress is the major detriment of debt. Factors that mitigate bankruptcy risk include firm’s access to fixed assets as collateral, and greater profit potential. For example, high low-growth firms that are more sensitive to fluctuations in business outlook and are therefore more vulnerable due to the costs of financial distress, choose lower higher leverage ratio. Smith and Watts 1992 and Barclay, Morella, and Smith 2003 report evidence consistent with this notion. Titman and Wessel 1988 find that debt ratio is negativelyrelated to the ‘uniqueness’ of a firm’s line of business, and Rajan and Zingales 1995 find that firm size is positively correlated with leverage and profitability is negatively correlated with leverage in all countries except Germany.Under tradeoff theory, deviations from target capital structure are only temporary. Firms make financing choices to rebalance debt ratio to the long-term optimum which implies that no systematic relation exits between leverage and investment opportunities BehavioralTheories?Pecking Order and Market TimingDeveloped by Myers 1984 and Myers and Majluf 1984, the pecking order model argues that managers have privileged information about firm value that investors do 84 Z. Feng et al. not have. Because managers can exploit this advantage to sell equity when it is overvalued, new shareholders avoid or discount equity, which implies that only inferiorfirms have the incentive to sell equity. The adverse selection cost is the main motivation for issuing the safest security first. As such, firms use retained earnings, debt and equity, in that order. Hence, high growth firms that need more external capital are predicted to have high leverage ratio. A dynamic version of pecking order theory, in contrast, predicts that, holding profitability constant, firms with investment opportunities keep payout low to conserve funds, and preserve debt capacity so as not to be forced into selling equity in the future. Shy am-Sunder and Myers 1999 find that over the period 1971?1989, pecking order theory has much greater time series explanatory power than the static tradeoff model. Similarly, Fame and French2002 find more profitable firms are less levered. However, using a panel of IPO firms, Helene and Liang 1996 find no relationship between the decision to raise external capital and the shortfall of internally generated funds. Frank and Goal 2003 conclude that over the period 1971?1988, new equity issues track financing deficit more closely than debt issues.Market Timing theory has two related implications. First, it suggests that firms issue securities when the market condition is favorable, and avoid issuing when the market is sluggish. This patternis consistent with anecdotal evidence that prior stock price movement andperception of under- or over-valuation of firms’ stock play importantroles in CFOs’ decision to raise external funds. Assuming that the ratio of market value to book value reflects investment opportunities, Baker and Wurgler2002 demonstrate that change in leverage is negatively related to previous period market-to-book ratio. Their data reveal that financing is done primarily by issuing equity, not with retained earnings. Second, current leverage is a decreasing function of‘external finance weighted-average’ of past market-to-book ratios which implies that past market valuation has a persistently negative impact on firm’s leverage ratio. Baker and Wurgler’s 2002 evidence is consistent with this notion, but contrary to both trade off and pecking order theories REIT Regulatory Environment and Capital Structure REITs are not required to pay taxes if they distribute 90% of taxable income as dividends. This nullifies two important benefits of debt. One, tax deductibility of interest payments is lost. Two, since most of the income is distributed, debt servicing is not critical in mitigating agency cost of free cash flow. Costs of financial distress further detract from the value of debt financing. Accordingly, the trade-off theory predicts that REITs should have low debt in their capital structure. But, anecdotal evidence is not consistent with this prediction. REITs carry significant amount of debt?in our sample, debt accounts for more than 50% of financing at IPO, gradually increasing to over 65% in 10 years Thepecking order theory offers some rationale for the use of debt financing?debt is preferred because shareholders discount the value ofnew equity out of suspicion that managers use privileged information to sell risky equity when it is overvalued. Based on information asymmetry between managers and shareholders, pecking order requires that managers have full discretion over the choice of funding On the Capital Structure of Real Estate Investment Trusts REITs 85 through retained earnings, debt and equity. This makes the relevance of the pecking order model somewhat questionable in the REIT context. To elaborate, high dividend payout reduces retained earnings for REITs so that funding choice is limited to debt and equity.2 Under this constraint, stock sales may be viewed with less skepticism. In addition, opinion varies on the extent of information asymmetry in the real estate sector. Some hold that with limited investment in human capital, and fewer strategic growth opportunities, REIT assets are relatively easier to value. Others contend that analysis of REIT assets requires special skills and knowledge about conditions of comparable properties, complex financing arrangements, and general and local economic trends. Han 2004 arguesthat fair market values of real estate transactions are difficult to determine because they often include heterogeneous, and illiquid assets. Finally, some authors i.e. Campbell, Ghosh, and Sirmans, 2001 argue that regulatory provisions restricting the sources of REIT income, and potential acquisition targets, to the realestate sector, and diffused ownership, exacerbate the information asymmetry problem. Overall, how information asymmetry affects REIT valuation and financing choice is an open question. Because of theirhigh payout requirement, REIT financing decision may not conform also to the dynamic version of the pecking order theory which states that firms reduce current leverage to avoid issuing equity when future capital needs arise Brown and Riddiough 2003 study the public offerings of equity REITs over the period 1993?1998. The authors report that maturity of REIT public debt is positively related to offer spread which is consistent with the predictions of the target debt ratio model ofCollin-Dufrense and Goldstein 2001. Corroboration for a target long-run debt ratio comes from the evidence that majority of the firms issuing debt was clustered just above the investment-grade rating. Further, a significant number of REITs that issue equity are highly leveraged and remain so subsequently. The authors conclude that REITs largely fund investment with bank lines of credit and other sources of private debt. When these sources are exhausted, REITs access the public capital market and use the issue proceeds to pay down credit lines in order to prepare for the next round of financing. Confirming the trend, Ott et al. 2005 report that REITs finance over 80% of firm-specific investment through equity and longterm debt, clearly a result of the high dividend payment. Our objective is to relate these decisions to the existing theory, REIT investment opportunities and theregulatory structure. Hypotheses The hypotheses are summarized in Table 1. Trade off theory predicts a low target debt ratio. Short term fluctuations in investment opportunities may move the capital structure away from the target, but if firms rebalance, no persistent patternbetween leverage and market-to-book would exist. The simple peckingorder theory invokes information asymmetry between shareholders and managers and predicts a positive relation between debt ratio and investment opportunities. Since REITs are limited in funding options due to high mandatory payout, however, a positive relation between leverage and market-to-book may be an artifact of the unique regulatory structure, not purely an attempt to avoid adverse selection costs. The dynamic pecking order theory implies an opposite relationship. The market timing theory which states that managers opportunistically issue equity when market valuations are high and adverse selection costs are low, implies a negative relation between market-to-book and leverage Data and Summary StatisticsOur study includes REITs that went IPO during 1991?2003 and forwhich all accounting and firm specific information required for analyses are available in the SNL database. Staring with the IPO date as a fixed starting point when managers decide on a particular capital structure, we investigate how capital structure changes over time. As noted byBaker and Wurgler 2002, the financing decision at IPO time is known tobe relatedto the market-to-book ratio.3 We collect each firm’s financialinformation, including total debt, total equity, total assets, total revenue, net income, depreciation, dividend amount, total investment in real estate, stock price, and the total number of shares outstanding. Table 2 shows the number of REITs inSNL database that went IPO between1991?2003, and number of REITs in the final sample by IPO year and calendar year. Most of the REITs have accounting and financinginformation 1 year prior to the year of interest, and hence are includedin the analysis to investigate the short term impact of market-to-bookon leverage ratio. However, missing values reduce the sample size whenwe test the long-term relationship between market-to-book and leverage ratios. This limits the scope and interpretation of our results somewhat.As shown in panel A of Table 2, the number of REITs in the sample is only four in 1992. The IPO activity picks up between 1994 and 1996 when the sample size jumps to 83 and then stabilizes at 108 in 2003. Thatmost firms survived during the entire period under study is apparent in the low attrition reported in panel B By the tenth year after IPO, as many as 30 of the original 33 REITs remained in the sample. However, as evident in column 2, availability of data is very limited for young IPO firms during the early years of the study. For example, only 68 of the eligible 107 firms have data in the first year after IPO. The proportionis much higher as the firms mature.The measurement of key variables follows standard definitions. Book debt is total assets minus book equity. Book equity is defined as total assets less total liabilities and preferred stock plus deferred taxesand convertible debt. Book leverage is calculated as the ratio of book debt to total assets D/A. Market equity is the product of number ofshares outstanding and the stock price. Market leverage is book debt divided by total assets minus book equity plus market equity. Previousstudies have employed both measures of leverage ratio. Myers 1977, however, notes that market values incorporate the value of the call option on the firm’s future ‘growth opportunities.’ Debt issued against these values can distort future real investment decisions. Indeed, anecdotal evidence suggests that in practice, managers tend to calculate debt ratios using book values.4 Additionally, we investigate the impact of investment opportunities on leverage ratios. Titman and Wessels 1988 and Fama and French 2002 suggest that a negative relationship between market leverage and investment opportunities may simply be a manifestation of better investment producing higher market values, rather than the workings of trade-off and pecking order models. Nevertheless, we use market leverage where appropriate to make our results comparable to extant evidence.Source: Zhilan Feng, Chinmoy Ghosh, C. F. Sirmans, 2007. “On the capital structure of real estate investment”. Journal of Real EstateFinance and Economics, vol.34, no.1, pp.81?105译文:房地产投资信托的资金结构一般来说,已知的资金结构理论可以分为两大类,一种是管理人员权衡债务利润和成本的优化,另一种是一些受管理者人对于市场的信息优势所影响的决策行为,以及利用偶然的机会出售证券而获得溢价等市场的整体状况。
