Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?
A) retained earnings
B) taxes
C) dividends
D) None of these will reduce the amount of capital returned to the investors.

Question

Quizplus · Accepted Answer

Dividends are the portion of earnings distributed to shareholders, thus they do not reduce the capital returned to investors; rather, they are part of it. Retained earnings and taxes reduce the amount available for distribution.

Not All Cash a Company Generates Will Be Returned to the Investors