Question: Is the given statement true or false? Companies that have positive-NPV projects should try to take them all; however, companies with only bad (negative-NPV) investments

Is the given statement true or false?

Companies that have positive-NPV projects should try to take them all; however, companies with only bad (negative-NPV) investments should not invest and should instead consider paying out their excess cash through a share repurchase or a higher dividend level, so that shareholders can take that money and invest it in a firm with better prospects.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!