Publicly traded companies often accumulate cash that is usually invested in riskless, liquid securities that yield low returns. Which of the following is a good reason for punishing companies that hold cash (by discounting the cash)?

a. The cash earns a lower rate of return than the cost of equity

b. The cash earns a lower rate of return than investments in operating assets

c. Investors can earn a higher return on the cash if it was returned to them.

d. The company has a good track record on operating investments and you are afraid that the company will not invest the cash

e. The company has a bad track record on operating investments and you are afraid that the company will invest the cash