What might an investor reasonably expect from a company with excess cash and few internal investment growth opportunities?
A)The company will buy Treasury bills with all the excess cash.
B)The company will split its share.
C)The company will declare a share dividend.
D)The company will pay a cash dividend or repurchase some of its own shares.

Question

Quizplus · Accepted Answer

If a company has excess cash and few growth opportunities, it is likely to return some of that cash to investors in the form of a cash dividend or share buyback. This can help increase shareholder value and improve the company's financial performance. Options A and B are unlikely, as investing in low-risk options such as Treasury bills or splitting shares may not provide significant growth opportunities. Option C, a share dividend, is not as common as a cash dividend or share buyback.

What Might an Investor Reasonably Expect from a Company with Excess