Which of the following are legitimate financial reasons for holding marketable securities?
A) Expansion of inventory for the summer selling season.
B) Payment of dividends.
C) The firm just sold long-term securities.
D) All of the above.
E) Only answers a and c above.

Question

Quizplus · Accepted Answer

Marketable securities are often held by firms for various financial reasons, including preparing for inventory expansion (like for a seasonal increase in sales), having funds available for dividend payments, and reallocating resources after selling long-term securities. All these activities require liquidity, which marketable securities provide.

Which of the Following Are Legitimate Financial Reasons for Holding