Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer to leave their cash outside the United States because using those funds to pay dividends or purchase treasury stock would
A) promote foreign investment.
B) decrease foreign exchange.
C) inflate stock prices.
D) create pressure for decreased exporting.
E) require a big U.S. corporate income tax payment.

Question

Quizplus · Accepted Answer

Leaving foreign cash outside of the U.S. helps to avoid the large U.S. corporate income tax payment that would be required if the cash were to be repatriated for use in paying dividends or purchasing treasury stock.

Many US Firms with a Large Percentage of Their Revenues Derived