Relevance of the notion of "cost of capital" to Islamic banking institutions: a theoretical and empirical study (Ph.D. Dissertation)

This thesis examines the applicability of both the conventional expression of Weighted Average Cost of Capital (WACC), and that of an alternative formulation, to Islamic banks. The research hypotheses argue that the calculation of WACC components and the implications and effect of WACC differ between conventional and Islamic banks. The new nature of depositors' funds is neither as a share capital nor liability but as a "profit and loss account". The conclusion supports the hypotheses; that The researcher concluded that an alternative formulation of WACC applies and needs to be utilised for Islamic banks.