Why Do Firms Sit on Cash?: An Asymmetric Information Approach

摘要: Cash holdings of U.S. firms have increased dramatically since 1980. The purpose this paper is to build a simple formal model cash that can explain and other empirical regularities. Our based on the well-known “lemons” problem associated with equity issuance. We show poor growth opportunities those excellent will not hold excess cash, while in middle range cash. derive implications relating extent asymmetric information, opportunities, value assets place, holding costs.