"As a source of finance, retained profit is better than other sources". Do you agree with this view/ Give reasons for your answers.

Yes, retained earnings are considered a preferable source of finance than the others. It is mainly because of the advantages that are associated with retained earnings as a long-term source of finance. Some of these benefits are

i. Increased price of equity shares- High retained earnings may lead to an increase in the price of equity shares.

ii. Reduced burden- It helps in reducing the burden of unexpected losses by acting act as a cushion at the time of crises.

iii. Permanent source of finance- These funds remain invested in the business for longer periods. 

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retained profit ..

  • permanent source of earning.
  • cheap source of finance
  • it is a source of hidden treasure for the company
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retained profit ..

  • permanent source of earning.
  • cheap source of finance
  • it is a source of hidden treasure for the company
  • -4

retained profit ..

  • permanent source of earning.
  • cheap source of finance
  • it is a source of hidden treasure for the company
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