PRC-3 · Chapter 4 · Question 22 of 65
If an organization wants to raise long-term finance without diluting control, increasing its debt burden, or paying interest, what internal source should it use?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Retained earnings
Explanation
Retained earnings represent internal profits kept by the company rather than paid as dividends. It involves no new debt and no new voting shareholders.
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