C urrently U.S. corporations have record-high cash holdings. Many argue that this phenomenon is related to the sluggish recovery of the economy: Firms holding more cash are investing less, and this prevents the economy from taking off. While referring to the cash holdings of Apple, the president of a business association stated “Why wasn’t Apple spending that money on expansion, new products an...

We analyze the risk characteristics and the valuation of assets in an economy in which the investment opportunity set is described by the real interest rate and the maximum Sharpe ratio. It is shown that, holding constant the beta of the underlying cash flow, the beta of a security is a function of the maturity of the cash flow. For parameter values estimated from U.S. data, the security beta i...

This study aims to analyze the effect of institutional ownership, board size, capital expenditure, net working capital, liquidity, leverage, cash flow ratio on holding before and during COVID-19 pandemic, differences in average holding. Based purposive sampling, there are 85 manufacturing companies 2019-2020. Hypothesis testing with regression analysis Wilcoxon signed-rank test using SPSS. Rese...

This study aims to show the effect of uncertainty on firms’ corporate investment and cash holding in five ASEAN countries, namely Malaysia, Indonesia, Singapore, Thailand, Vietnam. The was conducted using data from non-financial public listed firms these countries during 2006 2020 period. volatility is measured standard deviation economic policy index. results this find that increases decreases...

We comprehensively examine the effects of stock return volatility on firms’ financial and investment decisions. Consistent with theories of investment with financing frictions, firms with high volatility actively reduce their leverage, cut investment, increase cash holding, cut non-cash current assets such as inventories and account receivables, and cut dividend. The effects of volatility are s...

Although existing theories predict a causal link between informational frictions in financial markets and a firm’s choice of asset liquidity, the lack of an exogenous and clean measure of informational frictions hinders the precise identification of this link. Using the discontinuous requirement of financial reporting introduced by Section 404 of the Sarbanes-Oxley Act, we identify a causal eff...

This paper investigates the effects of macroeconomic volatility on non–financial firms’ cash holding behavior. Using an augmented cash buffer–stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross–sectional distribution of firms’ cash–to–asset ratios to narrow. We test this prediction on a panel of non–financial firms drawn from the annual COMPUSTAT databa...

This study aims to empirically demonstrate the effect of cash holding, financial leverage, profitability, and company size on income smoothing in Indonesia Stock Exchange's primary consumer goods sector from 2017 2021. The population amounted 98 companies a sample 16 companies. used logistic regression analysis moderation for hypothesis testing. findings revealed that holding leverage negativel...