that's more theoretical than practical. in many cases companies can work around that limitation to make such investments without (all of) those tax implications

that's more theoretical than practical. in many cases companies can work around that limitation to make such investments without (all of) those tax implications. money is typically returned to investors because the board and the executives want it to diversify themselves away, not because there are no npv positive projects to invest in. and there are plenty of ways to spend on protecting existing income streams, which is what we see companies doing regularly. there are lots of principle-agent problems and moral hazards in this realm that cloud the practical from the theoretical.