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Under the marginal principle of retained earnings:

Looking for the answer to the question below related to Financial Management?

Under the marginal principle of retained earnings:

 Options:

A. the firm must compare what it can earn with what shareholders could earn on funds if they were distributed
B. all funds above and beyond retained earnings are paid to shareholders
C. funds not paid to creditors and preferred shareholders belong to common shareholders
D. all projects are financed internally

 

The Correct Answer Is:

  • A. the firm must compare what it can earn with what shareholders could earn on funds if they were distributed

 

Conclusion

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