alleryExcessive ploughing back of profits may cause dissatisfaction because shareholders get:
ALower dividends
BHigher dividends
CExtra shares
DFree debentures
Answer & Solution
Correct answer: A. Lower dividends
1. Profit stays inside the business.
2. Less is paid out.
3. So shareholders receive lower dividends.
_Source: syllabus Business Studies, Chapter 8, Sources of Business Finance._
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