Extensive research in corporate finance suggests that strategic consideration determine the level of cash holdings, along with firm characteristics. Empirical findings suggest that the level of cash is positively associated with the risk of predation and systematic future market share gains,...

This study examines the revision in cash holdings and the market valuation of investment opportunities of 475 firms added to the Standard & Poor's 500 stock market index from 1980 to 2010. We find that newly indexed firms have evolved to significantly lower cash balances, which we partially...