Why were many companies using cash rather than stock

Reference no: EM131837177

Question: The March 4, 2010, edition of the Wall Street Journal Online contains an article by Jeffrey McCracken and Tom McGinty entitled "With Fistfuls of Cash, Firms on Hunt." Instructions Read the article and answer the following questions.

(a) How much cash did the nonfinancial (that is, nonbank-like) firms in the Standard & Poor's 500 have at the end of 2009? How big an increase in cash did this represent over the prior year?

(b) What reasons are given in the article for why companies might not want to keep hoarding cash?

(d) Often, companies issue shares of stock to acquire other companies. This represents a significant noncash transaction. At the time the article was written, why were many companies using cash rather than stock to acquire other companies?

(e) In addition to acquisitions, what other steps can companies take to reduce their cash balances?

Reference no: EM131837177

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