PRC-3 · Chapter 4 · Question 5 of 65
At the end of the year, Delta Corp decides to keep 40% of its net profit to fund a new factory rather than paying it out to investors. What is this internal source of finance called?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Retained earnings
Explanation
Retaining earnings involves keeping a portion of the business's profits for reinvestment instead of distributing them to shareholders as dividends.
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