After Earning $30 Million in Net Income, Rolatrim Industries Distributed

question 289

Multiple Choice

After earning $30 million in net income, Rolatrim Industries distributed $5 million in dividends to their stockholders. The board of directors of the firm decided to invest the remaining $25 million back into the business. This $25 million reinvestment of profits represents:

• A) a trust fund.
• B) retained earnings.
• C) preferred capital.
• D) mutual funds.

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