Why Are Companies Sitting on Cash Right Now?
Harvard Business Review
FEBRUARY 5, 2024
Many companies sit on piles of cash, even when rates of return suggest they shouldn’t. Why? Researchers have pointed to multiple reasons, including flexibility for M&A and tax advantages. But new research suggests it’s also a form of insurance, especially for smaller firms. Their likelihood of experiencing an adverse event (measured by the chance of being delisted) is significantly higher when they hold less cash.
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