If a firm has substantial excess cash, it may
1. repurchase some of its shares
2. increase its cash dividends
3. increase its liabilities
A)1 and 2
B)1 and 3
C)2 and 3
D)only 2

Question

Quizplus · Accepted Answer

When a firm has substantial excess cash, it may choose to repurchase some of its shares or increase its cash dividends to return value to shareholders. Increasing liabilities is not a direct use of excess cash.

If a Firm Has Substantial Excess Cash, It May