This study aims to investigate the impact of deviation from optimal level of cash holdings on adverse selection and moral hazard problems. The data set includes 106 listed firms of Tehran Stock Exchange during the period of 2005-2016 and both panel data and cross-sectional data multivariate regressions were utilized in different stage of analysis to test the hypotheses. According to the optimal...

Using variations in local real estate prices as exogenous shocks to corporate financing capacity, we investigate the causal effects of financial flexibility on cash policies of US firms. Building on this natural experiment, we find strong evidence that increases in real estate values lead to smaller corporate cash reserves, declines in the marginal value of cash holdings, and lower cash flow se...

We investigate the financial and real implications of corporate cash holdings over different capital market conditions in the period 1972-2008. A recent theoretical work implies that the value of corporate liquidity varies with the supply of external capital and should be higher during market-wide liquidity shocks. We find that for an average firm a marginal dollar in cash holdings has the same...

This paper examines how equity analysts affect corporate liquidity policy and the value of cash. Greater analyst coverage reduces information asymmetry between a firm and outside shareholders and enhances the monitoring process, in turn increasing the value of cash and allowing firms to hold more cash. The cash-to-assets ratio increases by 5.2 percentage points when moving from the bottom analy...

We investigate the determinants of cash holdings and firm value of Latin American firms during the Mexican crisis of 1994-1995 and the Brazilian crisis of 1999. We find that each crisis alters the determinants of cash and firm value differently. Larger firms increase their cash holdings during the Mexican crisis, while cross-listed firms increase their holdings of cash during the Brazilian cris...

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...

This study investigates empirically the value investors place in excess cash holdingand how managerial ability impact on the value of cash holding for Iranianfirms from 2006 to 2014. In this research, managerial ability calculated by usingthe data envelopment analysis (DEA). Following the approach of Faulkender andWang, we find that the relation between managerial ability and value of cash hold...

this study investigates empirically the value investors place in excess cash holdingand how managerial ability impact on the value of cash holding for iranianfirms from 2006 to 2014. in this research, managerial ability calculated by usingthe data envelopment analysis (dea). following the approach of faulkender andwang, we find that the relation between managerial ability and value of cash hold...

In this paper, we provide new and complementing international evidence on the relation between cash holdings, corporate governance, and firm value. Our sample consists of a crosssection of 1,875 firms from 46 countries in 2007. We construct eight different measures of firm-level corporate governance based on 64 individual governance attributes provided by Governance Metrics International (GMI)....