As we know corporate structure in any publicly traded firm is important aspect for firms financial growth. Therefore, what should firm do with the extra earning per share?

Multiple Choice

• should pay it out to shareholders unless the firm can earn a higher rate of return on the cash than the shareholders can earn by investing in the capital market.

• should always reinvest it in new equipment.

• should pay it out to management unless the firm can earn a higher rate of return on the cash than the management can earn by investing in the capital market.

• should invest it in the safest projects available.

• Should always invest it in U.S. equities.