A corporation can elect to allocate corporate profits into either

Question

Quizplus · Accepted Answer

A corporation can elect to allocate profits into either dividends, which are payments made to shareholders, or retained earnings, which are profits kept within the corporation for reinvestment or other purposes. Interest payments and bonds are forms of debt financing, while capital gains are a result of an increase in the value of an investment. Therefore, the most common and best choices are dividends or retained earnings, depending on the company's financial needs and goals.

A Corporation Can Elect to Allocate Corporate Profits into Either