Cash management is it possible for a firm to have too much cash? Why would shareholders care

Question:

Cash management is it possible for a firm to have too much cash? Why would shareholders care if a firm accumulates large amount of cash?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

See More Books

Question Posted: May 09, 2011 06:18 AM

See More Questions

Is it possible for a firm to have several different cultures? If so, what does this imply about the relationship between culture and performance?
Is it possible for a firm to have negative net working capital? How?
Is it possible for a firm to have a high degree of operating leverage and a low level of business risk? Explain.
A driver of a car is initially 455 miles from home, traveling toward home on a straight freeway at 70 miles per hour. (a) Write a formula for a linear function f that models the distance between the...
Consider the vectors A and B(vector) shown in FIGURE 3-42. Which of the other four vectors in the figure C(vector), D(vector), E(vector), and F(vector)) best represents the direction of (a) A(vector)...
A large crystal is constructed by stacking small, identical pieces of crystal, much as you construct a brick wall by stacking bricks. A unit cell is the smallest such piece from which a crystal can...
When the current through an inductor is decreasing at a rate of $2.0 \mathrm{~A} / \mathrm{s}$, the magnitude of the induced emf is $6.0 \mathrm{~V}$. What is the inductance of the inductor?
The comparative balance sheets for 2013 and 2012 are given below for Surmise Company. Net income for 2013 was $50 million. Required: Prepare the statement of cash flows of Surmise Company for the...
16. Let a1, a2, 17. a <0 is: (a) 22 be in H.P. with a = 5 and a20 = 25. The least positive integer n for which " (b) 23 Sum of the series rlog. r=1 (c) 24 (d) 25 r+1 + is: r
Identifying financing, investing, and operating transactions Required For a company like Canadian Tire Corporation, provide two examples of transactions that you would classify as financing,...
Costs of Borrowing Come and Go Bank Offers your firm a 9 percent discount interest loan for up to $15 million, and in addition requires you to maintain a 5 percent compensating balance against the...
Cash management what options are available to a firm if r believes it has too much cash? How about too little?
At the end of one day a clearing house member is long 100 contracts, and the settlement price is $50,000 per contract. The original margin is $2,000 per contract. On the following day the member...
Subjectivity can be successfully removed from the compensation administration process. Build an argument for and against this statement.
What are the advantages and disadvantages of (a) individual incentives, (b) group incentives, and (c) organization-wide incentives?
Explain how functional strategies can support an organizations corporate strategy.
Social Security disability and survivor benefits should be the sole responsibility of each employee. A company simply cannot be responsible for the financial welfare of its employees. Additionally,...
Does staffing really follow strategy? Are the job applicants knowledge, skills, and abilities the key, or is it the corporate strategy?
How decomposition is done in object oriented approach? Explain with an example.
Maria Castigliani is head of the purchasing department of Ambrosiana Merceti, a medium-sized construction company. One morning she walked into the office and said, The main problem in this office is...
To increase intensity of a wave by a factor of 50, by what factor should the amplitude be increased?
Debit and Credit Bookkeepers needs a total of $16,000 in cash during the year for transactions and other purposes. Whenever cash runs low, it sells $1,500 in securities and transfers the cash in. The...
The All Day Company is currently holding $690,000 in cash. It projects that over the next year its cash outflows will exceed cash inflows by $140,000 per month. How much of the current cash holdings...
Econoline Crush, Inc., uses a Miller-Orr cash management approach with a lower limit of $43,000, an upper limit of $125,000, and a target balance of $80,000. Explain what each of these points...
Briefly define TinyOS and explain its goals as an embedded operating system.?
Consider the graph shown on the right. Find the strongly connected components of the graph. Whenever you use DFS and there is a choice of nodes to explore, always pick the one that is alphabetically...
After viewing the previous video, "Types of Operating Systems As Fast As Possible", explain the difference between embedded operating systems and desktop operating systems. (300-yep, you guessed it)...

Cash management is it possible for a firm to have too much cash? Why would shareholders care

Question:

Step by Step Answer:

Yes Once a firm has more cash than it needs fo...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Corporate Finance questions