After paying its stockholders, a construction company decided to use the rest of its earnings to buy more buildings. What type of financing is this?
A) long-term loan
B) debt financing
C) distributed profit
D) retained earnings
E) selling stock

Question

Quizplus · Accepted Answer

Using earnings to reinvest in the business, such as buying more buildings, instead of distributing them to shareholders, is referred to as retained earnings. This is a form of self-financing where the company uses its own profits to fund its operations or expansion.

After Paying Its Stockholders, a Construction Company Decided to Use