Select the Incorrect Statement Concerning Retained Profits as a Source

question 36

Multiple Choice

Select the incorrect statement concerning retained profits as a source of finance.

• A)Retaining profits has no effect on who controls the business.
• B)The business does not have to wait to receive the funds when using retained profits.
• C)There is more scrutiny when retained profits are used for investment than when shares are issued.
• D)There are no costs associated with retaining profits.

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Definitions:

Existing Bonds

Bonds that have already been issued and are currently traded in the bond market.

Required

Necessary or needed for a particular purpose or result.

Catalysts

Substances that increase the rate of a chemical reaction without being consumed in the process.

Induced Fit

Conformational change in the active site of an enzyme that occurs when it binds to its substrate.