The effect of debt ratio on company market value; an application in the KOBI Sanayi Index

In this study, financial leverage ratios and market values of companies of 21 companies which those take action in Borsa Istanbul, KOBI Sanayi Endeksi. Afterwards with a help of Eviews 10 program, whether if there is long run cointegration between financial leverage ratios and market values are analyzed. General data of companies are collected by their quarterly balance sheet, while other half are based on semi-annual. As a result of study, it's understood that financial leverage ratio influences company market value. But power of influence is weak. As it is understood at the end of research, there are a lot of factors which those affect company market value. But financial leverage aka debt ratio takes place among these factors. In this case, it is apprehended that applying optimal financial leverage has positive effect on market value of a company, and amplifies their equity.