Companies that have lots of cash have several options on how to use it.

They can make acquisitions, an increasingly popular activity to boost revenue. They can return it to shareholders in the form of dividends or share buybacks. The latter is especially popular with corporate management, since reducing the number of shares can increase per-share earnings, a metric often used to determine bonuses. Companies can use cash for capital spending, building plants or making improvements in existing facilities. Or they can just sit on it.

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