A cash cow type of business:

a. is so profitable that it has no long-term debt.

b. is a business with such a strong competitive advantage that it generates big profits, big returns on investment, and big cash surpluses after dividends are paid.

c. generates unusually high profits and returns on equity investment.

d. generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, funding share buyback programs, and/or paying dividends.

d. generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, funding share buyback programs, and/or paying dividends.

Explanation:

In business a cash cow is a venture that generates income that is above that required for its formation. Companies always try to purchase cash cows because it will result in higher profits and balance out losses from less profitable business activities.

For example the iPhone is a cash cow for Apple because it generates revenue that is far above its market growth rate. So it uses income from iPhone sales to balance other business activities.