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Impacts of equity financing on liquidity position of a firm

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Abstract

It is concluded in the study that equity financing plays a central role in determination of the liquidity position of a firm. A 'U-shaped' relation between the equities and working capital has been observed, in the long-term. While, depreciation fund has been classified as a source of liquidity. It is the important conclusion that long-term debt may deteriorate the liquidity position of a firm. The study is based on a simulation analysis and 225 listed companies of the Karachi Stock Exchange are included in the model.

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  • Ayub Mehar, 2005. "Impacts of equity financing on liquidity position of a firm," Applied Financial Economics, Taylor & Francis Journals, vol. 15(6), pages 425-438.
  • Handle: RePEc:taf:apfiec:v:15:y:2005:i:6:p:425-438
    DOI: 10.1080/0960310042000314197
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    Cited by:

    1. Yung-Ming Shiu, 2006. "Corporate liquidity: evidence from the United Kingdom life insurance industry," Applied Economics Letters, Taylor & Francis Journals, vol. 13(15), pages 993-998.

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