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there are basically three reasons why firms hold cash, namely
speculation
precaution
transaction
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∙ 11y ago
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What is the definition of Transaction motive?
A desire to hold cash in order to conduct cash-based transactions.
What is the difference between a financial and an operating merger?
Financial MergerA merger in which the firms involved will not be operated as a single unit and from which no operating economies are expected. The incremental post-merger cash flows are simply the expected cash flows of the target firm.Operating MergerA merger in which, operations of the firms involved are integrated, in the hope of achieving synergistic benefits. In this case forecasting future cash flows is more difficult.
Can you hold a Michigan check for 6 months and then cash it?
You can hold it but you need to cash it before the end of 6 months. Usually checks have a validity period of 6 months and after that they become invalid. You may not be able to cash it after 6 months.
Why do firms invest and borrow?
Firms invest in order to make dividend and interest income when they have an excessof money over current operating expenses.Firms borrow to pay bills when they have an excess of operating expenses over the cash available.
Can a hold be put on a check after it is deposited in another account?
Yes - If your bank has not yet paid the cash No - If your bank has already paid the cash
How does uncertainty affect cash balance?
Answer:From a valuation perspective, there is no relation. Cash is valued at face value, whether the firm is considered a risk free investment or highly risky. Nevertheless, uncertainty may affect management decisions relating to the amount of cash they decide to hold. Firms in an uncertain environment may hold more cash in order to have more slack to absorb shocks than firms with stable cash flows.
Is the importance of financial managers to firms with large cash inflows greater than for firms with smaller cash flows?
true
How does the capital consumption allowance affect the firms cash flows?
answer the question
WHAT measure would be most useful in comparing the operating profitability of two firms in different industries?
cash in divided by cash out
When was Hold On - Rosanne Cash song - created?
Hold On - Rosanne Cash song - was created in 1986.
Define statutory assets?
Statutory assets are liquid assets that firms must hold to remain solvent and have partial protection against substantial investment loss. They are state regulated and must be in cash or marketable investments.
An equity issue sold to the firms existing stockholders is called?
A general cash offer
What are short-term very safe and highly liquid assets firms include in the cash holdings they report on their balance sheet?
Cash equivalents
Firms in which market structure hold the most market power?
Monopoly
Why firms invest and borrow?
Firms invest in order to make dividend and interest income when they have an excessof money over current operating expenses. Firms borrow to pay bills when they have an excess of operating expenses over the cash available.
How are cash flows and the firms stock price related?
In an ideal world, the value placed on a shares value is the current value of all future dividends issues. The greater a firms cash flow, the higher you would expect the dividend to be. Not living in the real world, and not having a crystal ball, the actual share price is determined more by market sentiment and speculation. Thus, there is often no real relationship between a firms cash flow, and its stock price.
What institutions hold blood or cash?
BANK
