A "yes" answer to which one of these questions is least apt to indicate that a firm should make a payout to shareholders?
A) Are all positive NPV projects funded?
B) Are the cash flows highly variable?
C) Is the debt ratio prudent?
D)Does the firm have sufficient cash for emergencies and unexpected opportunities?

Question

Quizplus · Accepted Answer

If the cash flows are highly variable, it may not be prudent to make a payout to shareholders as the firm may need to retain cash for future investments or unforeseen events. On the other hand, the other options (A, C, D) suggest that the firm has already taken care of its financial obligations and has surplus cash available for payouts.

A "Yes" Answer to Which One of These Questions Is