--%>

Illustrates reserves are real money or not

The part of the net income which is not distributed to shareholders goes to reserves (to shareholders’ equity). As dividends shows real money, reserves are real money as well. Is it true?

E

Expert

Verified

No, it is not true. The part of the net income which is not distributed to shareholders goes to reserves to the shareholders’ equity. When dividends shows real money that reserves are also real money.

   Related Questions in Corporate Finance

  • Q : Who explained the high-peak/fat-tails

    Who explained the high-peak/fat-tails?

  • Q : Long-Term Financing Needed Long-Term

    Long-Term Financing Needed : - At year-end 2012, total assets for Ambrose Inc. were $1.2 million and accounts payable were $375,000. Sales, which in 2012 were $2.5 million, are expected to increase by 25% in 2013. Total ass

  • Q : State capital formation Capital

    Capital formation: It is an increase in the stock of capital in particular period is termed as capital formation.

  • Q : How could prestigious investment bank

    I have a doubt about the Enron case. How could this prestigious investment bank advice investing while the quotations of the shares were falling?

  • Q : What is the impact of auto portfolio

    What is the impact of auto portfolio into the quotation of the shares?

  • Q : Difference between intrinsic value and

    XYZ explained the difference between intrinsic value and book value in terms of the money spent on a college education. Please provide another example using a different simile.

  • Q : Which model was great breakthrough for

    Which one model was great breakthrough for side of finance theory?

  • Q : When the dividend shows real money The

    The dividend is the part of the net income which the company distributes to shareholders. When the dividend shows real money, the net income is also real money. Is it true?

  • Q : Problem on exponential growth rate

    Atlanta Company stock is predicted to follow an exponential growth rate. The relationship among the current stock price P0, future price PT after time T, and continuously compounded rate of the return r, is: PT = P0eγT. The stock doesn’t pay any

  • Q : Problem on implied exchange rate a) The

    a) The Australian firm sold a ship to a Swiss firm and gave the Swiss client an option of paying either AUS10,000 or SF15,000 in 9 months. (i) In above, the Australian firm efficiently gave the Swiss client a free option to buy up