Financing Expense Restrictions’ Effects on Capital Structure
Businesses are seen to prefer liabilities over the use of equity in asset financing. The choice businesses make can cause the weight of liabilities to increase and, accordingly, also increase financing risk and fragility. With regard to the financial expense restriction, 10% of the amount correspond...
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| Language: | English |
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Istanbul University Press
2022-12-01
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| Series: | İstanbul İktisat Dergisi |
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| Online Access: | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/D54C4FB9C0BD4FF9B0A3DD26EA64A83D |
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| _version_ | 1850144083657359360 |
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| author | Kemal Faruk Yazgan Arif Saldanlı |
| author_facet | Kemal Faruk Yazgan Arif Saldanlı |
| author_sort | Kemal Faruk Yazgan |
| collection | DOAJ |
| description | Businesses are seen to prefer liabilities over the use of equity in asset financing. The choice businesses make can cause the weight of liabilities to increase and, accordingly, also increase financing risk and fragility. With regard to the financial expense restriction, 10% of the amount corresponding to the portion of the expense and cost items such as interest, commission, exchange difference, maturity difference, and profit shares that foreign resources obtain for asset financing in excess of the equity amount is added to the corporate tax base when determining financial profit. The regulations for this restriction are expected to impact businesses’ financing decisions. The aim of this study is to reveal the effects financial expenditure restrictions have on businesses’ capital structure. The study has concluded that the financial expense restriction will have a positive effect on businesses’ financing policies and therefore also on equity financing. |
| format | Article |
| id | doaj-art-c5fcc8379bfd42d6b3287befa0fa7bde |
| institution | OA Journals |
| issn | 2602-3954 |
| language | English |
| publishDate | 2022-12-01 |
| publisher | Istanbul University Press |
| record_format | Article |
| series | İstanbul İktisat Dergisi |
| spelling | doaj-art-c5fcc8379bfd42d6b3287befa0fa7bde2025-08-20T02:28:28ZengIstanbul University Pressİstanbul İktisat Dergisi2602-39542022-12-0172287790010.26650/ISTJECON2022-1073796123456Financing Expense Restrictions’ Effects on Capital StructureKemal Faruk Yazgan0https://orcid.org/0000-0003-4084-2969Arif Saldanlı1https://orcid.org/0000-0001-9990-9510İstanbul Üniversitesi, İstanbul, Türkiyeİstanbul Üniversitesi, İstanbul, TürkiyeBusinesses are seen to prefer liabilities over the use of equity in asset financing. The choice businesses make can cause the weight of liabilities to increase and, accordingly, also increase financing risk and fragility. With regard to the financial expense restriction, 10% of the amount corresponding to the portion of the expense and cost items such as interest, commission, exchange difference, maturity difference, and profit shares that foreign resources obtain for asset financing in excess of the equity amount is added to the corporate tax base when determining financial profit. The regulations for this restriction are expected to impact businesses’ financing decisions. The aim of this study is to reveal the effects financial expenditure restrictions have on businesses’ capital structure. The study has concluded that the financial expense restriction will have a positive effect on businesses’ financing policies and therefore also on equity financing.https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/D54C4FB9C0BD4FF9B0A3DD26EA64A83Dfinancing expense restrictioncapital structureequity financing |
| spellingShingle | Kemal Faruk Yazgan Arif Saldanlı Financing Expense Restrictions’ Effects on Capital Structure İstanbul İktisat Dergisi financing expense restriction capital structure equity financing |
| title | Financing Expense Restrictions’ Effects on Capital Structure |
| title_full | Financing Expense Restrictions’ Effects on Capital Structure |
| title_fullStr | Financing Expense Restrictions’ Effects on Capital Structure |
| title_full_unstemmed | Financing Expense Restrictions’ Effects on Capital Structure |
| title_short | Financing Expense Restrictions’ Effects on Capital Structure |
| title_sort | financing expense restrictions effects on capital structure |
| topic | financing expense restriction capital structure equity financing |
| url | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/D54C4FB9C0BD4FF9B0A3DD26EA64A83D |
| work_keys_str_mv | AT kemalfarukyazgan financingexpenserestrictionseffectsoncapitalstructure AT arifsaldanlı financingexpenserestrictionseffectsoncapitalstructure |