Impact of Cash Holdings on Investment Value

  title={Impact of Cash Holdings on Investment Value},
  author={Zane L. Swanson},
This paper has been revised into one subsequent SSRN working paper and another paper in progress.Popular press has argued that firms holding cash should be regarded highly by investors because firms will access good prospects. This view contradicts with the Jensen (1986) free cash flow proposition. This study examines the investor viewpoint by investigating investment returns of portfolios created according to trading strategies based on cash holdings and predictions of cash holdings. Data is… CONTINUE READING