Abstract:
In the corporate finance, the decision on
the capital structure and its components is viewed as
one of the most extensively researched area. In this
context, researchers carried out the study on liquidity
and capital structure in the Sri Lanka Telecom Plc.
Data on the Liquidity and Capital Structure from the
year 2005 to 2011 were collected for the study purpose.
Regression analysis was used to answer the research
question as what extent the Liquidity influences on
Capital Structure of the Sri Lanka Telecom Plc.
Findings reveled that, the decision making on the
capital structure is highly depending on the liquidity
management of the Sri Lanka Telecom Plc. Due to that,
the firm should focus on the liquidity management to
take the decision on the capital structure which should
lead to the firms value in the long term perspective.
