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https://oarep.usim.edu.my/jspui/handle/123456789/23308
Title: | Financial Sustainability of A Firm: Debt-based or Equity-based Financing to Pursue | Authors: | Umul Ain’syah Sha’ari Siti Raihana Bt Hamzah Karmila Hanim Kamil |
Keywords: | Equity-based financing, Financial sustainability, Monte carlo simulation, Economic crisis | Issue Date: | 2023 | Publisher: | Bank Indonesia Institute | Source: | Sha’ari, U. A., Hamzah, S. R. B., & Kamil, K. H. (2023). Financial Sustainability of A Firm: Debt-based or Equity-based Financing to Pursue. Journal of Islamic Monetary Economics and Finance, 9(2), 199–224. https://doi.org/10.21098/jimf.v9i2.1653 | Journal: | Journal of Islamic Monetary Economics and Finance | Abstract: | This study examines the potential of utilizing equity-based financing by companies in achieving financial sustainability as compared to debt-based financing. To this end, a conceptual framework of equity-based financing over debt-based financing is developed to provide an understanding of the concept of equity-based financing. Subsequently, this study analyses the credit risk exposure between equity and debt for selected sectors in Malaysia. More specifically, a Monte Carlo method is employed to examine the feasibility of the equity-based financing model in fostering the financial sustainability of companies through simulation of equity-based and debt-based financing models from the global financial crisis (GFC) period to the Covid-19 phase. This study finds that equity-based financing can reduce credit risk exposure when returns are tied to the company’s performance. The findings also show that equity-based financing can achieve financial sustainability regardless of any economic events. To conclude, equity-based financing can thus be a viable capital financing option for companies because it can contribute to long-term financial sustainability. |
Description: | Vol 9 No 2 |
URI: | https://jimf-bi.org/index.php/JIMF/article/view/1653 https://oarep.usim.edu.my/jspui/handle/123456789/23308 https://www.scopus.com/record/display.uri?eid=2-s2.0-85164520580&origin=resultslist&sort=plf-f&src=s&sid=0e0cc298ecf5c768c5f20709b52d364a&sot=b&sdt=b&s=TITLE-ABS-KEY%28Financial+Sustainability+Of+A+Firm%3A+Debt-based+Or+Equity-based+Financing+To+Pursue%29&sl=130&sessionSearchId=0e0cc298ecf5c768c5f20709b52d364a&relpos=0 |
ISSN: | 2460-6618 | DOI: | 10.21098/jimf.v9i2.1653 |
Appears in Collections: | Scopus |
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File | Description | Size | Format | |
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Financial Sustainability Of A Firm Debt-based Or Equity-based Financing To Pursue.pdf | 418.99 kB | Adobe PDF | View/Open |
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