Final answer:
Issuing new common stock is the action that increases the company's cash on the balance sheet, since it involves raising capital by selling ownership shares to the public, without the obligation of making interest payments.
Step-by-step explanation:
When a company is considering expanding or managing its financial capital, several strategies can be employed. Among the discussed options, issuing new common stock is the one that will directly increase the company's cash on the balance sheet. Issuing stock allows a firm to obtain financial capital without the need to make scheduled interest payments, which is the main disadvantage of borrowing from a bank or issuing bonds.
By selling ownership shares to the public, the company receives immediate cash, which is recorded on its balance sheet, boosting its cash reserves. Compared to the other actions given, such as purchasing equipment or paying dividends, which would decrease cash, or repurchasing common stock, and giving customers more time to pay, which would also not increase cash reserves, issuing stock stands out as the choice that will increase cash on the balance sheet.