American companies are sitting on billions of dollars. In fact, Apple has more money than the U.S. Treasury. Companies need an airbag cash to avoid taxes and resist another crisis, economists say.
Last April Apple announced its intention to pay shareholders $ 100 billion by 2015, the biggest dividend in US corporate history.
According to Federal Reserve (FED), at the end of 2012 the nonfinancial corporate business had 1,79 trillions of dollars. The companies in the list of 500 companies with greater capitalization of US. they had $ 1.27 trillion in 2012. Five companies (General Electric, Microsoft, Google, Cisco and Apple) have accumulated 25% of this amount.
In their study ‘Are U.S. Firms Really Holding Too Much Cash?’, Lauren Simon Hodrick, a professor at the Research Institute of economic policy at Stanford and the Stanford Business School, believes that the current U.S. companies are guided by certain factors accumulate when much liquidity:
1. Shield against economic instability
Corporations are lining their pockets in response to the challenges they face in the market. In the U.S., interest rates remain at historically low levels, while the economic outlook remains uncertain after the financial crisis.
2. Tax evasion
The huge cash reserves allow transnational corporations do not pay additional taxes. The U.S. tax law is designed so that it is more beneficial to save money in other countries rather than repatriate home. For example, Apple held 102,300 million dollars from offshore jurisdictions 145.000 million in late March 2013, shows Lauren Simon Hodrick.
3. The money generates more money
The cash gives to the companies the freedom of action. Warren Buffett, the most famous investor in the world has built his empire thanks to the fact that he always had a bag of cash in difficult times.