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Impacts of equity financing on liquidity position of a firm

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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Article provided by Taylor & Francis Journals in its journal Applied Financial Economics.

Volume (Year): 15 (2005)
Issue (Month): 6 ()
Pages: 425-438

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Handle: RePEc:taf:apfiec:v:15:y:2005:i:6:p:425-438
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