Thursday, January 31, 2008
Why do firms hold so much cash?
Why do U.S. firms hold so much more cash than they used to? by Bates, Kahle, and Stulz.Short version: firms are holding more cash now than they used to. This runs counter to theory that would suggest that as transaction costs decrease and hedging opportunities increase, cash holdings would decrease. Interestingly the increased cash holding does not appear related to agency cost
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