If a Corporation's Retained Earnings Are Expected to Create Future

question 73

Multiple Choice

If a corporation's retained earnings are expected to create future profits,the market price of the firm's stock will ________ and create a ________ for stockholders if the stock is sold.

• A)increase; capital gain
• B)decrease; capital gain
• C)increase; loss of wealth
• D)decrease; loss of wealth

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Definitions:

Rubber-Stamped Signature

A signature reproduced by a stamp, often used for routine or mass signings.

Typed Signature

A digital or electronic form of signing, where one's name is typed in a specific field to signify approval, acceptance, or agreement to a document.

Conspicuous Statement

A statement or notice that is made to stand out clearly and be easily noticed, often requiring a specific form of presentation to ensure visibility.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee’s name written on the document.