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A Firm That Is Growing More Slowly Than Its Sustainable

Question 61

Multiple Choice

A firm that is growing more slowly than its sustainable growth rate may face which of the following scenarios if it generates excess cash rather than make greater investments in its own business?


A) Use the excess cash to acquire other businesses.
B) Use the excess cash to increase dividends.
C) Do nothing and become "cash rich."
D) All of the above are realistic scenarios.

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