Chen, Hsuan-Chi; Chou, Robin K.; Lu, Chien-Lin - 2021
This study adopts a new perspective, misvaluation, to explain corporate propensity to hold cash. We find a strong cross …-sectional relationship between misvaluation and the propensity to hold cash, which can be attributed to firms’ equity-raising activities and … additional robustness tests reject alternative explanations, such as precautionary motives, agency conflicts, near-term cash …