Determination of Profit and Loss Sharing Ratios in Interest-Free Business Finance
AbstractThis paper discusses how profit and loss sharing ratios will be determined at the micro and micro levels in an interest free system of financing business operating side by side of an interest based conventional financing.It shows that leverage magnification of return on owners' equity is also available under the Islamic financing. It argues that for the bank Islamic finance may be more profitable than conventional financing
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3013.
Date of creation: 1985
Date of revision:
Publication status: Published in Journal of Research in Islamic Economics 1.3(1985): pp. 13-29
Profit sharing; macro level model; mico model; leverage effects; relative profitability;
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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- Hasan, Zubair, 2012.
"Incentive-compatible sukukmusharkah for private sector funding: Comment,"
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- Hasan, Zubair, 2012. "Incentive-compatible sukukmusharkah for private sector funding: Comment," MPRA Paper 41916, University Library of Munich, Germany.
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- Mehri, Meryem & Jouaber, Kaouther, 2012. "A Theory of Profit Sharing Ratio under Adverse Selection: The Case of Islamic Venture Capital," Economics Papers from University Paris Dauphine 123456789/9551, Paris Dauphine University.
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