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A-level Edexcel Business > Retained profits > Flashcards

Retained profits Flashcards

1
Q

• Cheap (though not free)

A

Benefit of retained profits

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2
Q

• ‘Cost’ is opportunity cost for shareholders leaving profits in the business

A

Benefit of retained profits

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3
Q

• Very flexible - management control how they are reinvested

A

Benefit of retained profits

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4
Q

• Shareholders control the proportion retained

A

Benefit of retained profits

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5
Q

• Do not dilute the ownership of the company - unlike the issue of new share capital

A

Benefit of retained profits

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6
Q

Retained profits are…but not free

Benefit

A

-Cheap

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7
Q

Cost is the…

Benefit

A

opportunity cost for shareholders leaving profits in the business

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8
Q

Very flexible

Benefit

A

Management control how retained profits are invested

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9
Q

Shareholders control the…

Benefit

A

proportion retained

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10
Q

They do not dilute…

Benefit

A

the ownership of the company

unlike the issue of new share capital

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A-level Edexcel Business (30 decks)

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