Cash retained and reinvested in the firm's operations is cash saved and invested on behalf of the firm's shareholders.

Question

Quizplus · Accepted Answer

Cash retained and reinvested in the firm's operations is used for the growth and development of the business, which ultimately benefits the shareholders by increasing the value of the company and potentially leading to higher stock prices and dividends. Therefore, the cash saved and reinvested is considered to be invested on behalf of the shareholders.

Cash Retained and Reinvested in the Firm's Operations Is Cash