Abstract
AbstractThis paper finds that investors evaluate cash holdings differently based on the source of cash flows. Using cash flows from related‐party sales as a proxy for diverse sources, we find that shareholders discount the value of cash holdings for firms with higher cash flows from related‐party sales. We find that firms use related‐party sales cash flows differently; cash flows from related‐party sales are more likely to be retained as internal cash reserves or distributed as dividends, rather than utilised for necessary investments. We further document a negative valuation of investments for firms with more related‐party sales.
Full Text 
Sign-in/Register to access full text options
Sign-in/Register to access full text options 
Paper version not known
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
