Corporate Cash Holdings And Firm-level Stock Price Crash Risk

This research examines how corporate cash holdings affect firm-level equity price crash risk.Following Opler et al.(1999)to compute corporate cash reserves,the study finds that future firm-level equity price crash risk maximizes with excess cash holdings.The study also finds evidence suggesting that companies with smaller board size and those with greater percentage of insiders mitigate the possibility of future corporate-level equity price crash risk.These results signify that excess cash holdings predispose managers to keep unpleasant disclosures,which increases the perception of investors of future corporate-level equity price crash risk.