The opening case describes the large amount of cash that businesses have been holding, and the concerns that have been expressed about that by various commentators. The case reviews the arguments both for and against the holding of large amounts of cash by corporations.

1. What are three main responsibilities of financial managers? How do these responsibilities influence the amount of cash that companies hold?

2. If companies paid out more money in dividends, do you think that consumers would spend more money and thereby boost the economy? Defend your answer.

3. Which of the two claims—that companies are hoarding cash or companies are not hoarding cash—do you think is most persuasive? Explain.