Business, Management and Accounting
3 years ago

Cash holding hurts firm value, but size and profit boost it!

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Lecture notes in networks and systems
A Model of Agency Theory-Based Firm Value Improvement Through Cash Holding with Firm Size and Profitability as Control Variable
Ibnu Khajar, Ayu Rakhmawati Kusumaningtyas

Paper Summary

The study looked at how cash holding, firm size, and profitability affect firm value in consumer goods companies. Cash holding was found to decrease firm value, while firm size and profitability increased it. Corporate governance can help improve firm value by moderating the impact of cash holding.

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