Explanation:

Option B is correct because:

• A profitable company with limited positive NPV projects has excess cash that cannot be profitably reinvested
• Returning cash to shareholders through dividends is the optimal use of funds in this situation
• This follows the principle that companies should pay dividends when they have surplus cash beyond what's needed for profitable investments

Fast-growing tech companies (Option A) typically need to reinvest all earnings for growth. Companies with volatile earnings (Option C) should maintain conservative dividend policies.