Foundations Of Finance
Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
Question
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Chapter 17, Problem 1RQ
Summary Introduction

To discuss: The reason why company A has more cash than company D

Expert Solution & Answer
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Explanation of Solution

Company A may thought of holding an unusually huge cash value in expectation of an acquisition opportunity. Furthermore, the cash may be used as a precaution for future happenings when it needs the cash and when they are unable to raise in some situation. Thus, company A holds more cash.

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