Investigating the effect of liquidity of the stock on the company's cash holding

Document Type : Original Article

Authors

shams

Abstract

Stock liquidity is an important criterion for investors that can influence the behavior and decisions of managers, including the decision on how much to hold company cash. The present study investigates the effect of stock liquidity on cash holding. This study is applied in purpose and is causal (post-event) correlation methodology. The statistical population of the study consisted of all listed companies in Tehran Stock Exchange. Using systematic elimination sampling method, 114 companies were selected as the sample of the research in the 6-year period between 2012-2012. The method used for data collection was a library and data were collected for measuring variables from coding site and corporate financial statements. Initial calculations were performed in Excel and then statata software was used to test the research hypotheses. The results show that stock liquidity has a significant and inverse effect on cash holding.

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