The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as _______________.
A) Restricted earnings
B) Venture capital
C) Retained earnings
D) Institutional investment

Question

Quizplus · Accepted Answer

Retained earnings are profits that a company chooses to keep for reinvestment in the business, rather than distributing them as dividends to shareholders. This decision is made by the company's management and board of directors. Retained earnings can be used for a variety of purposes, such as funding growth, paying off debt, or investing in new initiatives.

The Portion of a Company's Profits That Are Kept by the Company