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who owns the retained earnings of a public firm? a. common stockholders b. bondholders c. management...

who owns the retained earnings of a public firm?
a. common stockholders
b. bondholders
c. management
d. the IRS

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Answer #1

Answe-

Retained earning - It is a portion of net profit ramains with company after paying dividend to shareholder. It is retained by management for future investment or business opportunity's. It is treated as capital and recorded in book under the head Share holder's equity. Retained earning is retained by management but ultimate right on retained earning is of share holder's because it is part of net profit and instead of taking dividend they decided to retain it for future investment or contingency. Common stockholder also pass a resolution for distribution of retained earning.

So, Actual owner of retained earning is Common stock holder.

Correct option is A - Common stock holder

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