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Effects of Excess Cash Holdings on Firm Value: Study from the Perspective of Corporate Life Cycle

Zhijian Zeng, Xing Zhou
2014 Proceedings of the 2nd International Conference on Education, Management and Social Science   unpublished

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Based on the corporate life cycle theory, the effects of corporate excess cash holdings on firm value is conducted in this paper. The results show that a significant inverse U-shaped relation exists between excess cash holdings level and firm value. It indicates that lots of companies face the problem of financing constraints. Moreover, the results also show that the optimal excess cash holdings level is discrepant at different corporate life cycle stages. Therefore, in order to ensure the
more » ... rate cash policy is reasonable, the corporate should make the cash policy according to which corporate life cycle stage it is at.
doi:10.2991/icemss-14.2014.49 fatcat:vlgju375n5hzrjcfrjtax3pas4
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Zhijian Zeng, Xing Zhou. "Effects of Excess Cash Holdings on Firm Value: Study from the Perspective of Corporate Life Cycle." Proceedings of the 2nd International Conference on Education, Management and Social Science (2014)