All of the Following Are True of Retained Earnings Except

question 62

Multiple Choice

All of the following are true of retained earnings except:

• A) it is the difference between paid-in capital and the total dividends paid.
• B) it represents the amount of new capital shareholders indirectly contribute.
• C) it is equal to earnings times the quantity one minus the payout ratio.
• D) it is the amount of earnings plowed back into the firm.

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