What could they do with all that cash? Eventually, one would think it would manifest itself in one of these ways:
- Businesses could decide to expand, building new physical plants and hiring more workers. In addition to making the business grow, this would also help the American economy grow.
- Corporations could institute share buybacks. The upshot of this is that there are fewer shares then outstanding in the market, which drives the price of each share up.
- Stocks could pay increasingly large dividends. Dividend-paying stocks have become more prevalent in recent years; more than 400 of the 500 stocks in the S&P index now pay dividends, which is a record high.