Download This PaperUncertainty and the Value of Cash Holdings
13 Pages Posted: 28 Feb 2017 Last revised: 26 Dec 2017
Date Written: February 27, 2017
Abstract
We find that a firm facing higher uncertainty has a higher value of cash. This effect is attributed to the increased value of the option to wait and see as well as the aggravated financial constraints and mitigated agency conflicts.
Keywords: Uncertainty, Cash Holdings, Real Options, Financial Constraints, Agency Costs
JEL Classification: D22, D81, D92, G31, G32, G34
Suggested Citation: Suggested Citation
Im, Hyun Joong and Park, Heungju and Zhao, Gege, Uncertainty and the Value of Cash Holdings (February 27, 2017). Economics Letters, 155, 2017, pp. 43-48, Available at SSRN: https://ssrn.com/abstract=2924046
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