The Impact Of Unexpected Cash Holdings Of Listed Companies On Company Value

Cash is one of the critical financial resources for enterprises, and it is considered as the guarantee to fulfill the daily pay, maturing debt, paying taxes and other financial behaviors. The cash holdings behavior of enterprises is an important financial behavior, which reflects the company's financial strategy and business strategy, and which is closely related with company's business operations and development. In recent years, the problem of company's cash holdings has become one of a hot topic in academic areas at home and abroad.This article first consider data of Chinese listed company in 2005-2008 years as sample data to make a regression analysis about which factors are the major factors on the impact of cash holdings. Regression results show that there are twelve factors are the major factors on impact of cash holdings, such as cash flow, the volatility of cash flow, cash alternatives, financing costs, financial leverage, agency costs, and so on. Among of them, there are six variables are negatively related with cash holdings significantly, such as cash flow, the volatility of cash flow, debt maturity structure, agency cost, firm size and the growth of company, meanwhile, the cash alternatives, financing costs, financial leverage, the proportion of bank debt, board size and proportion of independent director are positive related with cash holdings significantly. In addition, the factors affected cash holdings are different in different industries, and the same factors are paying different important affect in different sectors.Since we have researched factors of influencing cash holdings in previous chapter, taking into account factors of cash holdings are different in different industries, this paper researches the relationship between unexpected cash holdings and company value bashed on data of Chinese Manufacturing Listed Companies in 2005-2008 years for the samples, besides, we divide all samples into two specific samples of excessive cash holdings and lack of cash holdings to research in-depth, we want to find if there are difference about the impact of unexpected cash on company value in different situation of cash holdings. The results show that: without considering the joint action of the agency costs and unexpected cash holdings, the effect of unexpected cash on company value is not significant in the whole sample and the excessive cash holding sample, but which is significant in the sample of lack of cash holdings. However, after joining the cross- variables of agency costs and unexpected cash holdings, the regression results show that, if the agency costs remain unchanged, the relationship between unexpected cash holdings and the company value is negative correlated significantly in companies whose cash holdings are excessive, but which is positive correlated significantly in companies which is lack of cash hold. The results show that the effect of unexpected cash holdings on company value is dependent on the agency costs.