Table 1 Costs of various Islamic financial instruments
From: Testing the pecking order theory of capital structure: the case of Islamic financing modes
Instruments | Direct costs | Indirect costs | Total costs | |||
|---|---|---|---|---|---|---|
Funds | Contracting/floatation | Dilution | Distress | Information | ||
Debt-based | ||||||
Murabahah | L(= 1) | L(= 1) | N(= 0) | M(= 2) | N(= 0) | 4 |
Ijara | L(= 1) | L(= 1) | N(= 0) | M(= 2) | N(= 0) | 4 |
Equity-based | ||||||
Mudarabah | M(= 2) | M(= 2) | M(= 2) | N(= 0) | H(= 3) | 9 |
Musharakah | H(= 3) | H(= 3) | H(= 3) | N(= 0) | M(= 2) | 11 |
Hybrid | ||||||
Sukuk | L(= 1) | M(= 2) | L(= 1) | M(= 2) | H(= 3) | 9 |