TY - CHAP
T1 - Islamic corporate finance
T2 - Capital structure
AU - Rasid, Mohamed Eskandar Shah Mohd
AU - Uddin, Ajim
AU - Chowdhury, Mohammad Ashraful Ferdous
N1 - Publisher Copyright:
© 2019 selection and editorial matter, M. Kabir Hassan, Mamunur Rashid and Sirajo Aliyu.
PY - 2019/6/4
Y1 - 2019/6/4
N2 - The capital structure choices of a firm not only determine the current value of the firm, but also largely determine its long-term survival. Modigliani and Miller’s seminal 1958 paper explicates conventional firms’ capital structure choices. However, we are yet to develop a solid theoretical framework about the financing decisions of Islamic firms. This is a review chapter on current developments in the field of Islamic capital structure. The chapter starts with a short discussion about the various sources of capital and their advantages and disadvantages, followed by a detailed description of traditional capital structure theories and their real-world empirical evidence. Finally, it discusses how the capital structure decision for Islamic firms differs from that for conventional firms, and the role sukuk, dual-banking system, and debt threshold play in determining Islamic firms’ capital structure.
AB - The capital structure choices of a firm not only determine the current value of the firm, but also largely determine its long-term survival. Modigliani and Miller’s seminal 1958 paper explicates conventional firms’ capital structure choices. However, we are yet to develop a solid theoretical framework about the financing decisions of Islamic firms. This is a review chapter on current developments in the field of Islamic capital structure. The chapter starts with a short discussion about the various sources of capital and their advantages and disadvantages, followed by a detailed description of traditional capital structure theories and their real-world empirical evidence. Finally, it discusses how the capital structure decision for Islamic firms differs from that for conventional firms, and the role sukuk, dual-banking system, and debt threshold play in determining Islamic firms’ capital structure.
UR - http://www.scopus.com/inward/record.url?scp=85108042437&partnerID=8YFLogxK
U2 - 10.4324/9781351061506-3
DO - 10.4324/9781351061506-3
M3 - Chapter
AN - SCOPUS:85108042437
SN - 9781138480919
SP - 54
EP - 73
BT - Islamic Corporate Finance
PB - Taylor and Francis
ER -