Question

In: Finance

​Other things held constant, which of the following actions would increase the amount of cash on...

​Other things held constant, which of the following actions would increase the amount of cash on a company's balance sheet?

Question 11 options:

​The company declares a stock split.

​The company cuts its dividend.

​The company repurchases common stock.

​The company purchases a new piece of equipment.

​The company gives customers more time to pay their bills.

Solutions

Expert Solution

If the company cuts the dividend paid, then that action will increase the cash in the balance sheet. If the company purchases a new piece of equipment then that reduces the cash. If the company gives customers more time to pay their bills then this action also reduces the cash inflow in the balance sheet. If a company repurchases common stock, this results in cash outflow. Stock split does not affect the cash balance on the balance sheet.

So, the correct option is option B.

jeff jeffy answered 2 years ago
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