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Firm liquidity and investment under uncertainty.

Publication: International Advances in Economic Research
Publication Date: 01-AUG-07
Format: Online
Delivery: Immediate Online Access
Full Article Title: Firm liquidity and investment under uncertainty.(RESEARCH NOTE)

Article Excerpt
JEL G30

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The assumption of perfect capital markets ensures that firms have access to an unlimited supply of funds at a constant cost of capital. Firm investment, in turn, depends wholly on the expected profitability of the assets in which the firm invests. Under some conditions, the separation of the firm's investment and financing decisions will persist even with market imperfections....

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