Which Statement Regarding Retained Earnings Is False

question 105

Multiple Choice

Which statement regarding retained earnings is false?

• A) Reinvesting earnings is more expensive than raising capital from outside sources.
• B) Increases in retained earnings can occur because a firm has net income.
• C) Increases in retained earnings can occur when the firm's common stockholders let management reinvest net income back into the firm rather than payout dividends.
• D) None of the above.

---

Definitions:

Institutional Review Board

A committee that reviews and approves research involving humans, ensuring ethical standards are met.

Publicly-Funded

Financially supported by government resources, typically through taxation, for the benefit of the general public.

Privately-Funded

Describes projects, initiatives, or entities that receive their financial support from private sources rather than government funding.

Federally-Funded

Financial support given by the federal government to support a wide range of projects and programs.