Not All Cash a Company Generates Will Be Returned to the Investors

question 7

Multiple Choice

Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?

• A) retained earnings
• B) taxes
• C) dividends

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Definitions:

Sum Certain

A legal term referring to a specified or fixed amount of money.

Unconditional Promise

A pledge or guarantee that is absolute and not subject to any conditions or contingencies.

Bearer Instruments

Bearer instruments are financial documents that entitle the holder or bearer of the document to the rights or property stated in the document, without requiring proof of ownership.

Demand Instrument

A financial document that requires payment to be made by the issuer upon request by the holder of the document.