Which of the following is an indirect investment by a shareholder?
A)The cash paid for shares.
B)A plot of land exchanged for shares.
C)The net income retained by the company.
D)The dividends paid to shareholders.

Question

Quizplus · Accepted Answer

The net income retained by the company is an indirect investment by a shareholder because it is reinvested by the company in order to grow the business and potentially increase the value of the shares. The other options are direct investments: A) cash paid for shares directly purchases ownership in the company; B) exchanging land for shares is a direct transaction between the shareholder and the company; and D) dividends are a direct return on investment paid to shareholders.

Which of the Following Is an Indirect Investment by a Shareholder