Which One of the Following Equations Represents Retained Earnings Activity

question 123

Multiple Choice

Which one of the following equations represents retained earnings activity?

• A)Beginning Balance + Net Income + Dividends = Profits for the Year
• B)Beginning Balance + Cash Inflows - Cash Outflows = Ending Balance
• C)Beginning Balance + Dividends - Net Income = Ending Balance
• D)Beginning Balance + Net Income - Dividends = Ending Balance

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Definitions:

MCC Schedule

Stands for Marginal Cost of Capital Schedule, which displays the relationship between the cost of new capital and the total amount of new capital raised.

Capital Structure

Capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities.

Flotation Costs

Expenses incurred by a company in issuing new securities, including fees to underwriters, legal fees, and registration fees.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional stock.