Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1017839 | Journal of Business Research | 2014 | 11 Pages |
Abstract
In this research, we have analyzed the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to financing affect this relationship. In addition, we have analyzed the relationship between working capital and company value. Using a sample of Brazilian public companies listed on BM&FBOVESPA from 1995 through 2009, we found evidence for the following conclusions: an extra Real (R$) of investment in working capital is significantly less worth, on average, than an extra Real (R$) of investment in cash; and, on average, increasing the level of working capital at the beginning of a fiscal year reduces company value.
Related Topics
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Business and International Management
Authors
Juliano Ribeiro de Almeida, William Eid Jr.,