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The management of a firm considers paying out its excess cash as a dividend to its shareholders or investing the excess cash in the core
The management of a firm considers paying out its excess cash as a dividend to its shareholders or investing the excess cash in the core operating activities of the firm. The return on these investments is 12% whereas the opportunity cost of capital is 99. QUESTION Should the management of the firm payout its excess cash as a dividend to its shareholders or invest the excess cash in the core operating activities of the firm? First indicate PAYOUT or INVEST, then motivate your choice
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