Investigating the Factors Affecting the Value of Cash held in the Companies Listed in Tehran Stock Exchange under Conditions of Uncertainty

This study assessed the factors affecting the value of cash held in the companies listed in Tehran Stock Exchange under conditions of uncertainty. The purpose of this study was to evaluate whether cash holding is valuable in terms of uncertainty and what effects financial problems, agency costs, and growth rate have on the relationships between these variables. The results of this research can provide investors with information about the cash policy maintained for creating value.

In this research, 168 companies were listed in Tehran Stock Exchange during the period of 2011-2018. To test the hypotheses, the models of Falkander et al. (2006), Dietmar and Mart Smith (2007), and Dennis and Sibika (2010) were used.

The results of testing the hypotheses showed that there was an effect between uncertainty and the value of cash held by the companies listed on Tehran Stock Exchange. The relationship between these two variables was strengthened, especially under conditions of uncertainty in the presence of agency problems and financing limitations. For every rial the companies held in cash, they got a value of more than 1 rial. However, investment opportunities had no effects on this relationship.

A review of the literature revealed that no research had been conducted in the field of cash value and there had been no restrictions on financing and agency costs so far. In this regard, new statistical models were used in this study.