Most firms deleverage from their historical peak market-leverage (ML) ratios to near-zero ML, while also markedly … increasing cash balances to high levels. Among 4,476 nonfinancial firms with five or more years of post-peak data, median ML is 0 … firms deleverage to restore ample financial flexibility and are difficult to reconcile with most firms having materially …

for operating efficiency reasons alone. This hypothesis suggests that (1) firms selling assets have high leverage and …

almost always volatile. Most firms increase leverage sharply as cash balances (internal funds) become scarce. Capital …

Firms with greater financial flexibility should be better able to fund a revenue shortfall resulting from the COVID-19 … shock and benefit less from policy responses. We find that firms with high financial flexibility within an industry … return persists as stock prices rebound. The firms more exposed to the COVID-19 shock benefit more from cash holdings. There …