The relationship between capital structures and company values of companies - an application in the BIST industrial index

The existence and direction of the relationship between capital structure and firm value is one of the most debated issues in the financial world. The relationship between capital structure and firm value can be explained by the classical approaches (Net Income Approach, Net Operating Income Approach, Traditional Approach and Modigliani Miller Approach) and modern approaches (Tax Approach, Approach of Bankruptcy Cost, Agency Theory, Trade-off Theory, Financial Hierarchy Theory, Signal Theory and Market Timing Theory). Although there is a relationship between the capital structure and the firm value in the studies conducted on the topic, a definite result has not been reached. The main purpose of this study is to examine the relationship between capital structure and firm value. Companies in Stock Exchange Istanbul (BIST XUSIN) Industrial Index have been included in the survey between 2010 and 2017. The information about the firms subject to the research has been taken from the official internet addresses of the Istanbul Stock Exchange and Public Lighting Platform and it has been prepared by analysts for analysis. The relationship between capital structure and firm value was tested by panel data analysis method. The hypothesis that "there is a relationship between capital structure and firm value" has been tested in the research. As a result of the study, it has been determined that firms use debts in capital structures adversely affect firm value and equity use affects firm value positively.