A major theme in corporate finance is that when firms have "excess" cash they should pay it out to their shareholders.
a. What are the interpretations/implications of this concept for China's dividend policy and national savings and consumption?
b. How might Chinese firms' excess cash holdings lead to greater consumption even if dividends do not increase? Hint: Who is another major stakeholder in a company other than shareholders?

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The Answer of A major theme in corporate finance is that when firms have "excess" cash they should pay it out to their shareholders.
a. What are the interpretations/implications of this concept for China's dividend policy and national savings and consumption?
b. How might Chinese firms' excess cash holdings lead to greater consumption even if dividends do not increase? Hint: Who is another major stakeholder in a company other than shareholders?

A Major Theme in Corporate Finance Is That When Firms