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The value of corporate cash holdings has increased significantly in recent decades. On average, $1 of cash is valued at $0.61 in the 1980s, $1.04 in the 1990s, and $1.12 in the 2000s. This increase is predominantly driven by the investment opportunity set and cash-flow volatility, as well as secular trends in product market competition, credit market risk, and within-firm diversification. We document a secular decrease in the speed of adjustment (SOA) in cash holdings, particularly for financially constrained firms with cash deficits, suggesting that capital market frictions can account for the trend in the value of cash holdings.

This study examines the allocation of cash proceeds following 400 subsidiary sales between 1990 and 1998. Retention probabilities are increasing in the divesting firm's contemporaneous growth opportunities and expected investment. Retaining firms, however, also systematically overinvest relative to an industry benchmark. Shareholder returns to retention decisions are positively correlated with growth opportunities and benchmarked investment, but negatively correlated with benchmarked investment for firms with poor growth opportunities. Shareholder returns to debt distributions are increasing in industry-benchmarked leverage. Overall, the results of this study cohere with the hypothesized trade-off between the investment efficiencies associated with retained proceeds and the agency costs of managerial discretion and debt.

The average cash-to-assets ratio for U.S. industrial firms more than doubles from 1980 to 2006. A measure of the economic importance of this increase is that at the end of the sample period, the average firm can retire all debt obligations with its cash holdings. Cash ratios increase because firms' cash flows become riskier. In addition, firms change: They hold fewer inventories and receivables and are increasingly R&D intensive. While the precautionary motive for cash holdings plays an important role in explaining the increase in cash ratios, we find no consistent evidence that agency conflicts contribute to the increase.

The COVID-19 pandemic underscored the promise of monoclonal antibody-based prophylactic and therapeutic drugs 1 – 3 and revealed how quickly viral escape can curtail effective options 4 , 5 . When the SARS-CoV-2 Omicron variant emerged in 2021, many antibody drug products lost potency, including Evusheld and its constituent, cilgavimab 4 – 6 . Cilgavimab, like its progenitor COV2-2130, is a class 3 antibody that is compatible with other antibodies in combination 4 and is challenging to replace with existing approaches. Rapidly modifying such high-value antibodies to restore efficacy against emerging variants is a compelling mitigation strategy. We sought to redesign and renew the efficacy of COV2-2130 against Omicron BA.1 and BA.1.1 strains while maintaining efficacy against the dominant Delta variant. Here we show that our computationally redesigned antibody, 2130-1-0114-112, achieves this objective, simultaneously increases neutralization potency against Delta and subsequent variants of concern, and provides protection in vivo against the strains tested: WA1/2020, BA.1.1 and BA.5. Deep mutational scanning of tens of thousands of pseudovirus variants reveals that 2130-1-0114-112 improves broad potency without increasing escape liabilities. Our results suggest that computational approaches can optimize an antibody to target multiple escape variants, while simultaneously enriching potency. Our computational approach does not require experimental iterations or pre-existing binding data, thus enabling rapid response strategies to address escape variants or lessen escape vulnerabilities. By demonstrating a computational approach to restore the clinical efficacy of a COVID-19 antibody, the potential to rapidly update clinical antibodies is explored.

This paper examines management’s motives for rejecting takeover bids and the associated shareholder wealth effects. We develop measures of initial bid quality and find a significant negative correlation between the quality of a bid and rejection. The likelihood of higher follow-on offers decreases with bid quality and is greater when targets have classified boards and chief executive officers (CEOs) with significant personal wealth tied to the transaction. Target CEOs who fail to close high-quality offers experience a significant rate of forced turnover. Overall, the results support a price improvement motive for contested bids.

We empirically investigate whether corporate governance structure is different between focused and diversified firms, and whether any differences in corporate governance are associated with the value loss from diversification. We find that, relative to focused firms, CEOs in diversified firms have lower stock ownership and lower pay-for-performance sensitivities. Diversified companies, however, have more outside directors, no difference in independent block-holdings, and sensitivity of CEO turnover to performance similar to that in single-segment firms. Moreover, we find no compelling evidence that internal governance failures are associated with the decision to diversify, or that governance characteristics explain the value loss from diversification. Our findings suggest that diversified firms use alternative governance mechanisms as substitutes for low pay-for-performance sensitivities and CEO ownership. We conclude that agency costs do not provide a complete explanation for the magnitude and persistence of the diversification discount.

Recent scandals have brought rankings to the forefront of the legal profession. Several of the most prestigious academic institutions have withdrawn from being ranked, citing the problematic nature of the rankings. However, rankings persist for both legal academics and practice, and there is substantial sentiment to improve the methodologies, with little detail as to how to improve. In this paper, we rank law firms on their clients' IPO performance. We focus on the most relevant outcomes: litigation, first-day returns, disclosure, and legal fees. The focus on these measures provides benefits relative to other methodologies, which typically focus on inputs or size-related characteristics. Namely, this ranking is less manipulable and more accurately captures performance metrics that matter most to clients' shareholders. Our rankings control for observable and unobservable deal characteristics, which helps ensure we capture law firm quality, not client traits. With the rankings based on legal fees, potential clients can compare the benefits of a particular law firm (e.g., lower litigation or higher selling prices) against the additional cost of hiring a higher-quality law firm. Hence, our rankings allow for a value-for-the-money comparison of law firms for clients selling shares in an IPO.

The COVID-19 pandemic has highlighted how viral variants that escape monoclonal antibodies can limit options to control an outbreak. With the emergence of the SARS-CoV-2 Omicron variant, many clinically used antibody drug products lost in vitro and in vivo potency, including AZD7442 and its constituent, AZD1061. Rapidly modifying such antibodies to restore efficacy to emerging variants is a compelling mitigation strategy. We therefore sought to computationally design an antibody that restores neutralization of BA.1 and BA.1.1 while simultaneously maintaining efficacy against SARS-CoV-2 B.1.617.2 (Delta), beginning from COV2-2130, the progenitor of AZD1061. Here we describe COV2-2130 derivatives that achieve this goal and provide a proof-of-concept for rapid antibody adaptation addressing escape variants. Our best antibody achieves potent and broad neutralization of BA.1, BA.1.1, BA.2, BA.2.12.1, BA.4, BA.5, and BA.5.5 Omicron subvariants, where the parental COV2-2130 suffers significant potency losses. This antibody also maintains potency against Delta and WA1/2020 strains and provides protection in vivo against the strains we tested, WA1/2020, BA.1.1, and BA.5. Because our design approach is computational - driven by high-performance computing-enabled simulation, machine learning, structural bioinformatics and multi-objective optimization algorithms - it can rapidly propose redesigned antibody candidates aiming to broadly target multiple escape variants and virus mutations known or predicted to enable escape. Competing Interest Statement M.S.D. is a consultant for Inbios, Vir Biotechnology, Senda Biosciences, Moderna and Immunome. The Diamond laboratory has received unrelated funding support in sponsored research agreements from Moderna, Vir Biotechnology, and Emergent BioSolutions. J.E.C. has served as a consultant for Luna Labs USA, Merck Sharp & Dohme Corporation, Emergent Biosolutions, and GlaxoSmithKline, is a member of the Scientific Advisory Board of Meissa Vaccines, a former member of the Scientific Advisory Board of Gigagen (Grifols) and is founder of IDBiologics. The laboratory of J.E.C. received unrelated sponsored research agreements from AstraZeneca, Takeda, and IDBiologics during the conduct of the study. Lawrence Livermore National Laboratory, Los Alamos National Laboratory, and Vanderbilt University have applied for patents for some of the antibodies in this paper, for which T.A.D, A.T.Z., E.Y.L., F.Z., A.M.L., R.H.C., J.E.C., and D.M.F. are inventors. Vanderbilt University has licensed certain rights to antibodies in this paper to Astra Zeneca.

The average cash to assets ratio for U.S. industrial firms increases by 129% from 1980 to 2004. Because of this increase in the average cash ratio, firms at the end of the sample period can pay back all of their debt obligations with their cash holdings, so that the average firm has no leverage when leverage is measured by net debt. This change in cash ratios and net debt is the result of a secular trend rather than the outcome of the recent buildup in cash holdings of some large firms, but is more pronounced for firms that do not pay dividends. The average cash ratio increases over the sample period because firms change: their cash flow becomes riskier, they hold fewer inventories and accounts receivable, and are increasingly R&D intensive. The precautionary motive for cash holdings appears to explain the increase in the average cash ratio.

Working Paper No. 12534 The average cash to assets ratio for U.S. industrial firms increases by 129% from 1980 to 2004. Because of this increase in the average cash ratio, American firms at the end of the sample period can pay back their debt obligations with their cash holdings, so that the average firm has no leverage when leverage is measured by net debt. This change in cash ratios and net debt is the result of a secular trend rather than the outcome of the recent buildup in cash holdings of some large firms. It is concentrated among firms that do not pay dividends. The average cash ratio increases over the sample period because the cash flow of American firms has become riskier, these firms hold fewer inventories and accounts receivable, and the typical firm spends more on R&D. The precautionary motive for cash holdings appears to explain the increase in the average cash ratio.