Record Details

THE ROLE OF CORPORATE ZAKAT ON OPTIMAL CAPITAL STRUCTURE POLICY: EVIDENCE FROM MALAYSIAN FIRMS

Journal of Islamic Monetary Economics and Finance

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Field Value
 
Title THE ROLE OF CORPORATE ZAKAT ON OPTIMAL CAPITAL STRUCTURE POLICY: EVIDENCE FROM MALAYSIAN FIRMS
 
Creator Talattov, Abrapuspa Ghani
Sanusi, Nur Azura
Kusairi, Suhal
Shaari, Abu Hassan
 
Description In the finance literature, the relationship between capital structure and firm value has been extensively investigated, both theoretically and empirically. The main issue on corporate finance is how firms dealing with the important decision of capital structure. In this study, a model of capital structure is formulated in which corporate tax and zakat payment exist by firms into the consideration of combination of debt and equity. The theoretical model as shown by comparative statics prove the implication which is negatively relationship between leverage of the firm and the corporate zakat payment. Meanwhile, the empirical evidence reveals several implication as follows, (1) tax deduction reduces the current liability item relative to the firms that prefer equity financing, (2) the significant of zakat is consistent with the theoretical model that zakat would encourage firm to issue more equity than debt, (3) the strong significant relationship between return on assets with the leverage are the leading indicator of capital structure in all models.
 
Publisher Bank Indonesia
 
Date 2016-02-29
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://jimf-bi.org/index.php/JIMF/article/view/544
10.21098/jimf.v1i2.544
 
Source Journal of Islamic Monetary Economics and Finance; Vol 1 No 2 (2016): FEBRUARY; 259-292
2460-6618
2460-6146
 
Language eng
 
Relation http://jimf-bi.org/index.php/JIMF/article/view/544/528
 
Rights Copyright (c) 2016 Abrapuspa Ghani Talattov, Nur Azura Sanusi, Suhal Kusairi, Abu Hassan Shaari