Describe the relationship between the firm's cash management program and the firm's risk of insolvency.
What will be an ideal response?
Question 2
Which of the following statements concerning stock repurchases is MOST correct?
A) Repurchasing stock is strictly a financing decision made by the corporation.
B) Increasingly companies are using stock repurchases to distribute cash to their shareholders,
but dividends remain the primary means to distribute cash.
C) A tender offer is the only way to complete a stock repurchase due to SEC rules.
D) Companies currently spend more money on stock buybacks than on dividend payments.