Company next will surely invest in some asset or it has to take decisions to

Company next will surely invest in some asset or it

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also. Company next will surely invest in some asset, or it has to take decisions to further expand its operations and functions. The company may have to do acquisition or taking new projects in future. All these tasks cannot be done without having sufficient amount as cash in hand. Retained earnings basically have two purposes. The first one is to pay out dividends and the second is to keep amount as reserves for future business operations. 3.12 In case of debt financing the company has to pay interest first. The interest is paid to creditors and this amount is to be paid out of the profit that the company earned. After the payment is made to creditors the payment is made to the shareholders in the form of dividend. This payment
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is given priority after the payment is made to creditors. But in case of equity financing dividend payment is directly made to the shareholders. 4-2 In a grocery store the inventory will comprise of several items that need to be preserved.
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  • Fall '08
  • TAVBIN

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