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Hi sir, good day.
A question about reserve:
In the lecture, you said that reserve is anything extra owed to shareholders over the share capital(e.g. retained earnings)
But why would company still owes shareholders money after it has paid them dividends? Could you please help to explain, thank you so much!!!
Companies do not normally pay out all of their profit as dividend. The profit not paid as dividend is retained in the company and increases the reserves.
Hi sir, I watched your later lectures and I feel like I’ve understood. Thank you sir!
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