The marginal principle of retained earnings means that each, Ask an Expert

Finance

The marginal principle of retained earnings means that each potential project to be financed by retained earnings must:

yield a return equal to or greater than the marginal cost of capital.

have an internal rate of return greater than the corporate growth rate of dividends.

provide enough return to pay the corporation's marginal tax rate.

provide a higher rate of return than the stockholders can achieve after paying taxes on the distributed dividends.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92404974

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