Company Bongo has $1,000,000 in extra cash beyond what it needs for continuing operations. Bongo decides to pay the excess cash out to stockholders as a dividend. Company Tango has $1,000,000 in extra cash beyond what it needs for continuing operations. Tango decides to keep the cash for its future needs. Typically what is the difference in a company that decides to pay out excess cash versus one that keeps excess cash?

Answer rating: 100% (QA)

Introduction When companies find themselves with excess cash beyond what is required for their ongoing operations they have a choice to make regarding how to manage that surplus Two common options are ... View the full answer