Suppose a firm has $100 million in excess cash. It could
A)invest the funds in projects with positive NPVs.
B)pay high dividends to the shareholders.
C)buy another firm.
D)do all of the options.

Question

Quizplus · Accepted Answer

Each option (investing in projects with positive NPVs, paying high dividends to shareholders, and buying another firm) represents a viable use of excess cash for a firm, aiming to maximize shareholder value.

Suppose a Firm Has $100 Million in Excess Cash