Which of the following is correct regarding cost of retained earnings ?

CS Executive · Financial and Strategic Management · PYQS · June 2022
Which of the following is correct regarding cost of retained earnings ?
(A) Since the company is not required to pay dividend on retained earnings, there is no cost associated to it
(B) Opportunity cost of foregone dividends must be considered as cost of retained earnings
(C) Both (A) and (B) are correct
(D) None of the above

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Financial Management

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