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The value Relevance of Cash Holding in the Companies Listed in Tehran Stock Exchange
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Abstract: (12019 Views) |
| One of the most important issues in financial management is cash holding. How to use firm’s assets and especially firm’s cash is a major discussion between stockholders and managers. To maximize firm’s value, managers try to choose a suitable combination of firm’s assets and debts. In this paper, it is tried to test the value relevance of cash holdings. This study is an experimental-basic research and on the nature is a correlational. The multiple regression model with pooling data is used. To test the research hypotheses a sample of 118 companies listed in Tehran stock exchange, using screening sampling is selected, over the period 2006-2010. The results of study show that cash holdings don’t have negative relation with firm’s value, but extra cash holdings with current level of firm’s cash have negative relation with firm’s value. Also, stockholders pay attention to current ratio and immediate ratio in leveraged companies very much. |
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| Keywords: Value Relevance, Cash Holdings, Benchmark Return for the stock, Financial Leverage |
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Full-Text [PDF 929 kb]
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Type of Study: Research |
Subject:
Special
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