THE EFFECT OF DIVIDENT DISTRUBITION RATIOS ON DEBT INSTRUMENTS

Abstract

Due to vanishing of economical and financial boundaries in the globalizing world, various options are available for firms to reach their essential capital resources. Firms have to increase their values, profit from their outputs and make new investments. Firms need capital to exist in the economic cycle, to perform their activities and to maintain continuity. Obtaining capital used to finance assets of campanies is very important for its future sources and their cost. New funding preferences in emerging capital markets offer opportunities to lower alternative capital costs to minimum levels by comparing to existing opportunities. Firms may go on to issue bonds for financing needs that are necessary to meet capital deficiency, finance their investments, develop and grow. The aim of this study is how the divident distrubition of companies has an effect on costs when they prefer bond for credit by using the annual data panel analysis method for the period 2012-2016 of the BIST 100. It has been aimed to contribute to the relationship between the divident distrubition ratios and the bond issuance costs and to contribute to the literature in terms of determining the direction and amount of this relationship. Variables used in the study were examined in terms of stationarity, auto correlation, varying variance and cross sectional dependence, and the preliminary specification tests were completed and the model was adapted by making necessary changes and applications. According to the result of the study, the model determined within the scope of the study is meaningful whereas there is not a statistically significant relation between the profit share distribution ratios and the annual interest rates paid to private sector bond. This is thought to be due to the fact that private sector bond issuance is not yet at exactly the desired level of supply and demand imbalance and secondary bond markets in today's markets.