The Marginal Principle of Retained Earnings Means That Each Potential

question 92

Multiple Choice

The marginal principle of retained earnings means that each potential project to be financed by retained earnings must:

• A) provide a higher rate of return than the shareholders can achieve after paying taxes on the distributed dividends.
• B) yield a return equal to or greater than the marginal cost of capital.
• C) provide enough return to pay the corporation's marginal tax rate.
• D) have an internal rate of return greater than the corporate growth rate of dividends.

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Definitions:

Deadline

A time or date by which a task or project must be completed.

Project Draft

A preliminary version of a project or document that outlines the main ideas and structure, used for review and further development.

Team Creativity

The generation of innovative ideas and solutions through collaborative efforts within a team.

Varying Beliefs

Different or diverse opinions, convictions, or faiths held by individuals or groups.