When a firm reinvests some of its net income rather than distributing it to owners, the result is an increase in the firm's _____.
A) cash flows
B) liquid assets
C) net liabilities
D) retained earnings

Question

Quizplus · Accepted Answer

When a firm reinvests some of its net income rather than distributing it to owners, the result is an increase in the firm's retained earnings. Retained earnings are the portion of a company's net income that is not distributed as dividends to shareholders but is instead kept as part of the company's profits.

When a Firm Reinvests Some of Its Net Income Rather