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If a Firm Incurs a Loss During a Particular Year

Question 47

Multiple Choice

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?


A) It increases.
B) It is unchanged.
C) It decreases.
D) It doubles.
E) It has to be returned to shareholders.

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