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

Question

Quizplus · Accepted Answer

Dividends are actually a way of returning capital to investors, not reducing the amount returned. Retained earnings and taxes, on the other hand, are factors that can reduce the amount of capital returned to investors.

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