B) Banks do charge them interest on that money. So their opportunity cost = (Money * (Potential return - bank interest rate), but risk also has a cost.
C) As a public company Edit:(Ahold) could sell stock and gain capital without making their numbers look bad.
IMO, if there was a 5% risk of going bankrupt it's a now brainer. If it’s less than 5% they can mitigate it by keeping more cash on hand.
(about Ahold, without knowing the details, the liquidity problem was at the time when details of shady accounting in a US subsidiary came to light. You can't issue more stock in a few days to cover immediate liquidity problems. plus investors aren't going to be too happy when you're diluting their stock just to cover an operating loss. It's a different thing when you're doing it to raise money to expand the business.)
No, optimizing for profit ignores your risk to capital. The US banking history has a long history of Martingale style investments where a high probability for modest return risks huge amounts of capital. http://en.wikipedia.org/wiki/Martingale_(betting_system) The important difference is banks risk far more capital than they have so a Martingale style bet works in their favor.
Alhold however, was risking 15 billion in capital to make a modest return. IMO, if you’re going to risk 15 billion then go whole hog and run a financial institution to better balance your risks. Why risk zero when you can go all the way to negative 15 billion etc.
PS: I know that's not what you meant by optimizing for profit, but they were still making a 15 billion dollar bet for a few millions of dollars in annual return.
I think we're on the same page but I don't understand your last line - are you saying that companies with 'low' (single digit) returns are suboptimal choices for investors?
As to safe return, as you say their stock holders where paying a premium for safety and unless the R/W was awe inspiring I suspect most of them would rather gone to safer route.
(Like it says in the OP) Zappos is not a public company, and if the Zappos board had been confident that Zappos could become a public company, they would not have objected to the direction desired by the CEO.