Marginal principle of retained earnings means

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Reference no: EM131794175

Question: 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.

Reference no: EM131794175

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