I've been told that high inflation rates lead to high cost of capital for businesses (in one of the answers here - High Leverage Inflation Hedges for Personal Investors).
My question is:
Consider a company like Microsoft, with billions and billions of dollars in cash on hand. What is the impact of high inflation on this company? Does it hurt this company, because cash is trash and is now worth less, or does it help this company, because that amount of cash becomes a competitive advantage (other companies would need to borrow at high interest rates to achieve the same sized warchest)?
I'm not asking if MSFT is a good investment, pretend it's any company you like with high cash reserves.