Relationship between risk of debt financing and value of the coal company

Debt financing is universal in the term of operation of a firm. Risk of debt financing is certain combined with debt funds. The more debt financing is, higher the risk is. Variance between the real return and expected value is manifested by risk of debt financing, the more variance is, higher the risk is. The better method to solve risk is to realize the maximizing returns. In the hypothesis of efficient capital market, the maximizing returns are equivalence to the maximizing value of the company. Based on MM theory, analysis for relationship between debt financing and the corporate value has been made which the equation of corporate value on debt financing have been deduced. Further, in order to protecting benefits of debt-holders, amortization has been employed to deduce the new equation.