Which of the Following Is Correct When Considering Retained Profits

question 39

Multiple Choice

Which of the following is correct when considering retained profits as a form of financing?

• A)Financing is immediate as retained profits are already held by the company.
• B)Companies can only pay out 50% of their retained profits on dividends so there is always money available.
• C)Businesses either pay out all their retained earnings on dividends or they pay none at all.
• D)All of the above statements are correct.

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Definitions:

Mineral Oil

A colorless, odorless, light oil derived from petroleum, used as a lubricant, laxative, and in various industrial applications.

Emollient

A substance that softens and moisturizes the skin, reducing itching and flaking by forming a protective layer on the skin surface.

Lubricant

A substance applied to reduce friction between surfaces in mutual contact, which can also refer to products used to facilitate various medical or personal procedures.

Peristalsis

The series of wave-like muscle contractions that move food through the digestive tract.