Foundations Of Financial Management
17th Edition
ISBN: 9781260013917
Author: BLOCK, Stanley B., HIRT, Geoffrey A., Danielsen, Bartley R.
Publisher: Mcgraw-hill Education,
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Chapter 18, Problem 1DQ
Summary Introduction
To explain: The relation shared between the marginal principle of
Introduction:
Retained Earnings:
Retained earnings is a portion of the profits earned by a business not disbursed by the company as dividend to its shareholders so that it can be used for future investments.
Expert Solution & Answer
Answer to Problem 1DQ
The marginal principle of retained earnings states that a company should perform an analysis of whether the company or stockholders earn more on the funds related to retained earnings.
Explanation of Solution
Explanation:
As per the marginal principle of retained earnings, the earnings that the stockholders would earn on other investments should also be considered. According to this principle, a company should analyze the earnings of company as well as shareholders to see who earns most on the funds associated with retained earnings.
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Chapter 18 Solutions
Foundations Of Financial Management
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - Prob. 8DQCh. 18 - Prob. 9DQCh. 18 - Prob. 10DQ
Ch. 18 - Prob. 11DQCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Prob. 4PCh. 18 - Prob. 5PCh. 18 - Planetary Travel Co. has $240,000,000 in...Ch. 18 - Prob. 7PCh. 18 - Prob. 8PCh. 18 - In doing a five-year analysis of future dividends,...Ch. 18 - Prob. 10PCh. 18 - The shares of the Dyer Drilling Co. sell for $60 ....Ch. 18 - Prob. 12PCh. 18 - Prob. 13PCh. 18 - Phillips Rock and Mud is trying to determine the...Ch. 18 - Prob. 15PCh. 18 - Prob. 16PCh. 18 - Prob. 17PCh. 18 - Prob. 18PCh. 18 - Prob. 19PCh. 18 - Prob. 20PCh. 18 - Prob. 21PCh. 18 - Prob. 22PCh. 18 - Prob. 3WE
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