Ask Question
12 August, 08:43

For years Microsoft did not pay dividends to its shareholders. Instead it held back these profits to be used for future growth or expansion. These undistributed profits are referred to

1. ascurrent assets.

2. owners' equity.

3. retained earnings.

4. dividends payable

+2
Answers (1)
  1. 12 August, 10:05
    0
    3. retained earnings.

    Explanation:

    When a company earns profit, taxes are deducted to find the net profit or net earnings. From these, it pays dividends at a certain dividend payout ratio; which is usually dividends / net profit. Whatever remains is reinvested back into the company for funding potential profitable projects and other expansions and are referred to as retained earnings. This gives the retention rate which is basically (1 - payout ratio).
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “For years Microsoft did not pay dividends to its shareholders. Instead it held back these profits to be used for future growth or ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers