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I'm in Business School and took a class in Finance. In a lecture the professor presented what to do if a company has too much cash, the options where: 1. Inves
by driscoll42 3y ago
I'm in Business School and took a class in Finance. In a lecture the professor presented what to do if a company has too much cash, the options where:
1. Invest in positive NPV projects
2. Store some for a rainy day
3/4. Pay divdends or stock buybacks
Only after did I think "You know, what about lowering prices or paying employees, these options are soley about shareholders". But... yes, managers are taught to think about increasing shareholder wealth above all.
- dehrmann 3y ago> But... yes, managers are taught to think about increasing shareholder wealth above all. Saving money for a rainy day helps employees, too. Investing in new projects does indirectly because staffing up those projects increases the demand for labor, so the price of labor goes up.
- pnt12 3y agoThe good old trickle down.