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Real Time Insight

Large companies have been hoarding cash since the start of the financial crisis. Per FT & Deloitte, 32% of the largest non-financial companies currently own about 82% of the $2.8 trillion cash pile.

And five companies account for about 14% of the entire cash stash.

Apple $146.8
Microsoft $80.7
Google $56.5
Verizon $54.1
Samsung $49.0
However most of the cash owned by tech giants is held overseas. Tax regulations make repatriation of this cash unattractive. Of late, these companies have been facing growing pressure from activist investors to return more cash via dividends and buybacks. In fact, Apple paid out $33 billion to shareholders last year and plans to return $100 billion by the end of 2015.

Record low interest rates have also encouraged many companies to borrow more but they have not been putting that cash to work.

What do you think is the best use of the corporate cash hoard in 2014:

A: Spend more on dividends and buybacks
B: Increase capital spending
C: Improve balance sheets by reducing leverage
D: Do nothing (or just wait for a tax holiday)

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