If a corporation retains all its profits and distributes none of the profit to owners, how can owners benefit?
A) If the retained earnings are expected to create future profits, the market price of the firm's stock will increase and create a capital gain for stockholders if the stock is sold.
B) Shares of stock can be converted into bonds so stockholders will be able to earn coupon payments.
C) Owners will benefit by changing the board of directors.
D) Owners will only benefit if some profits are paid out in the form of dividends.
A
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The primary tool utilized by the Federal Reserve today in conducting monetary policy is
a. the discount rate. b. reserve requirements. c. open market operations. d. selective credit controls.
What is the length of the term of the members of the Board of Governors of the Federal Reserve System?
a. Four years. b. Six years. c. Fourteen years. d. Life or until the member resigns.