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It has been said that holding cash isn't necessarily bad for a company. My belief is that the company can repurchase shares, therefore increasing their debt/equity ratios. Higher debt = higher tax shield so the value of the company is greater. Now, theory says, that's not true because if the markets are efficient and the stock is fairly priced, than buying the stock is a zero NPV project. No value creation. Both arguments make logical sense, but I can't seem to reconcile the two. Read More