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What are the motives for holding cash?

In: Business & Finance [Edit categories]

Answer:

There could be many reasons for a company wanting to hold cash. They might be in acquisition mode and be negotiating to buy equipment or other companies. The company may require the cash for cash flow purposes in the near future. The company may have plans to pay the cash out as a dividend in the near future. Holding cash however can be dangerous because in some cases it makes a company vulnerable to a takeover bid, or the company may miss out on investment opportunities that could bring the company additional return.

First answer by ID1279550478. Last edit by ID1279550478. Question popularity: 2 [recommend question].

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