The study Firm's stock liquidity effects on firms financial performance in TSE

Firm’s stock liquidity decreases cost of capital transaction and bid and ask spread. In spite of existence these relationship researchers had doubt about direction and significant of firm’s stock liquidity effects on long term firm performance. The purpose of this study is to investigate the effect of firm’s stock liquidity on firm financial performance. So we randomly choose 112 firm samples from Tehran Stock Exchange (TSE) on cross-sectional base in 2007. The results of this study shows that There is a significant and positive relationship between firm’s stock liquidity and financial performance. The results of this study can be useful for investors, financial managers, and stock exchange and accounting policy maker to improve their policy about disclosure and firm value.