Explain the Term Creation as a Factor to Be Considered

question 36

Essay

Explain the term creation as a factor to be considered when selecting a business organizational form.

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Definitions:

Retained Earnings

The part of net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares, rather than cash, based on the proportion of shares already held.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Dividend Payable

A liability reported on a company's balance sheet for dividends declared by the board of directors but not yet paid out to shareholders.