Why do you think a company would want to retain earnings as


Assume you are a corporate shareholder. Would you prefer to receive a stock dividend or a cash dividend? Why?

Now assume you are a corporation. Would you prefer to issue a stock dividend or a cash dividend? Why?

Why do you think a company would want to retain earnings as opposed to distributing it to its shareholders?

In your opinion, why would a company decide to perform a stock split?

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Accounting Basics: Why do you think a company would want to retain earnings as
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