Munich Personal RePEc Archive

Capital Structure of Malaysian Firms: Financing the Deficit and Shari’ah Compliance

iqbal hussain, hafezali (2017): Capital Structure of Malaysian Firms: Financing the Deficit and Shari’ah Compliance.

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Abstract

Our paper evaluates the capital structure of Malaysian firms from a unique perspective by evaluating the impact of Shari’ah compliance on firms’ financing decision. We find that firms that are Shari’ah compliant tend to lean towards lower debt issues to finance their deficits, implying that the compliance status has an impact on their cost of equity which ultimately affects cost of capital.

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