How Can Too Much Free Cash Flow Be Problematic? Explain

question 24

Essay

How can too much free cash flow be problematic? Explain how a firm might establish
a dividend policy that could minimize this concern.

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Definitions:

Situated Identity

A conception held by a person in a situation that indicates who he or she is in relation to the other people involved in that situation.

Front Region

A term in sociolinguistics and social psychology referring to the setting or stage where individuals perform certain roles under social observation.

Ingratiation

The deliberate use of deception to increase a target person's liking for us in hopes of gaining tangible benefits that the target person controls. Techniques such as flattery, expressing agreement with the target person's attitudes, and exaggerating one's own admirable qualities may be used.

Supplication

An impression management tactic that involves convincing a target person that you are needy and deserving.