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We examine the determinants and implications of holdings of cash and marketable" securities by publicly traded U.S. firms in the 1971-1994 period. Firms with strong growth" opportunities and riskier cash flows hold relatively high ratios of cash to total assets. Firms" that have the greatest...
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This paper explores a one-period model for a firm that finances its operations through debt provided by heterogeneous creditors. Creditors differ in their beliefs about the firm's investment outcomes. We show the existence of Stackelberg equilibria in which the firm holds cash reserves in order...
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We explore how trade credit complements cash holdings in product market competition. First, similar to cash to cash … show that both trade credit and cash holdings are strategically valuable in product market competition and their valuations … credit practices and product market competition. We also show that the value of trade credit depends on whether suppliers are …
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