Author Question: If a corporation retains all its profits and distributes none of the profit to owners, how can ... (Read 74 times)

karen · **on:** Jun 29, 2018

If a corporation retains all its profits and distributes none of the profit to owners, how can owners benefit?

A) If the retained earnings are expected to create future profits, the market price of the firm's stock will increase and create a capital gain for stockholders if the stock is sold.
B) Shares of stock can be converted into bonds so stockholders will be able to earn coupon payments.
C) Owners will benefit by changing the board of directors.
D) Owners will only benefit if some profits are paid out in the form of dividends.

Question 2

If, for a given percentage decrease in price, quantity supplied decreases by a proportionately smaller percentage, then supply is

A) elastic. B) perfectly elastic. C) unit elastic. D) relatively inelastic.

dpost18 · **Reply #1 on:** Jun 29, 2018

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