The Relationship Between Changes in Capital Structure and Changes in Equity Liquidity

Authors

Abstract

Basically,maximizingthewealthofshareholdersandreducing the cost of capital are among financial manager's targets, and the capital structure decision is one of the effective decisions to reach these goals. Also, the impact of equity liquidity on the value of firms and stocks is important and it is expected that reducing the equity liquidity has effects on increasing expected returns.
The main objective of this study is considering the relationship between the changes in capital structure and changes in equity liquidity in listed companies on Tehran Stock Exchange (TSE) during 2004-2008. The panel least squares method is used to examine the hypothesis.
The results indicate that changes in capital structure has a significant negative impact on changes in equity liquidity but changes in equity liquidity does not have a significant impact on changes in capital structure

Keywords


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