Excess Cash Held by a Firm Should Be

question 42

Multiple Choice

Excess cash held by a firm should be:

• A)Reinvested by the firm in projects offering the highest rate of return.
• B)Reinvested by the firm in projects offering rates of return higher than the cost of capital.
• C)Reinvested by the firm in the financial markets.
• D)Distributed to shareholders in the form of dividends.