> The second case is more risky Not if they're otherwise identical companies, it isn't. There may be reasons to expect a correlation between risk and cash hold

> The second case is more risky Not if they're otherwise identical companies, it isn't. There may be reasons to expect a correlation between risk and cash holdings, or something to that effect, but ultimately a share in a company is a share of ownership of that company's assets. If a company didn't become $10B more valuable when given $10B in cash, where exactly did that value disappear to? Value doesn't vanish into thin air simply because it's now owned by a company.