Nowadays, business groups play an outstanding role in financial markets. Corporates in the trading groups are able to use technology, capital, human resources, productions and services of other members in the group in addition to their own resources and capabilities. Thus, this paper studies the effect of business group affiliation on cash holdings and return on equity. The sample involves 94 c...

The paper explores the driving forces behind corporate cash holdings by analyzing past literature and extending this research to the behavior of firms after the 2008 recession. I look at the cash to assets and net debt to assets ratios from October 1980 to October 2011 to obtain an understanding of the past and current state of cash holdings. A comprehensive literature review is done on agency ...

This paper explores the hypothesis that the rise in intangible capital is a fundamental driver of the secular trend in US corporate cash holdings over the last decades. Using a new measure, we show that intangible capital is the most important firm-level determinant of corporate cash holdings. Our measure accounts for almost as much of the secular increase in cash since the 1980s as all other d...

aaccording to the trade-off theory, firm managers consider the transaction and precautionary motives to determine the optimal level of cash by comparing the benefits and costs of cash holdings. the purpose of this paper is to examine the impact of deviation from expected optimal cash on future stock returns among irans’s listed companies (tehran stock exchange). the analyses are performed by us...

Article history: Received 31 August 2009 Received in revised form 24 May 2010 Accepted 2 June 2010 Available online 10 June 2010 We analyze whether the organizational structure of firms (i.e., whether a firm is diversified or focused) affects their cash holdings. Using Compustat firm level and segment-level data, we find that diversified firms hold significantly less cash than their focused cou...

The aim of this study was to investigate the relationship between growth opportunities, risks, and relative changes in the Company's cash assets. This study is a literature study and analysis was based on an analysis of panel data. In this study, a financial data of 112 companies listed in Tehran Stock Exchange during the period 2009 to 2014 have been reviewed. The results in relation to the fi...

Article history: Received 17 January 2014 Received in revised form 28 May 2014 Accepted 29 May 2014 Available online 12 June 2014 This article investigates the impact of the observation that managers can use cash to defer bankruptcy on default risk and corporate financial policies. I show that with managerial cash use to defer default, the impact of cash on default risk depends on two opposing ...

This paper studies the impact of both solvency and liquidity concerns on corporate …nance. The …rm optimally chooses capital structure, cash holdings, dividends and default while facing stochastic cash ‡ows with two sources of uncertainty. The expected cash ‡ows are uncertain and low pro…tability leads to solvency distress. Moreover, cash ‡ows are subject to liquidity shocks that cause liquidit...

Stock Liquidity and Corporate Cash Holdings: Feedback and the Cash as Ammunition Hypothesis We advance the feedback/cash as ammunition hypothesis, namely that firms hold cash to address feedback from stock prices to cash flows and growth opportunities. Firms with more liquid stocks are expected to hold more cash, the opposite of the prediction from a standard information asymmetry perspective o...