STOCK LIQUIDITY & CAPITAL STRUCTURE: EVIDENCE FROM KSE-100 INDEX LISTED FIRMS

Abstract

Purpose It is critical to underline the importance of liquidity on manufactured companies listed on the KSE-100 Index. The focus ofthis research is to examine quantitatively and determine the effect ofstock liquidity on capital structure keeping other things constant. Methodology This study make use ofsecondary data from the KSE-100 Index manufacturing companies. In terms of secondary data, this paper uses daily data from the Pakistan Stock Exchange for 23 stocks traded over a five-year period to identify the important components that make some stocks more acceptable to traders. Amivest liquidity ratio, which displays the amount ofcapital required to modify price by 1%, is used to analyze liquidity. Design Because this subject is currently underdiagnosed, this work focuses on the influence of several liquidity factors on the Amivest Liquidity ratio. Findings that Amivest Liquidity influence both measures of leverage namely debt to in case of KSE-100 index manufacturing companies. This study finds equity ratio and debt to total assets tatios Limitations several concerns relating to the research area, but not all of them will be addressed, in the investigation topics will be the only subject ofthe research