With the reform of our property rights system, the maturity of the capital market, and the diversification of corporate financing, the capital structure decision has become the major concern of financial management. There are numbers of researches on how to determine the optimal capital structure, what factors affect the capital structure and what the relationship is like between the capital structure and the firm value. Built upon prior literature, this paper investigates how managerial power influences the capital structure with the operation risks and the characteristics of the directors’ structure. We find that the capital structure deviates from the optimal level more in firms with stronger managerial power, and these firms have a stronger discount on such deviation.