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If a firm decides to reinvest profitsrather than distribute dividends, what could be a potential consequence?
If a firm decides to reinvest profits
rather than distribute dividends, what could be a potential consequence?
Reductionin operational capabilities
Reduction
in operational capabilities
Immediatedecrease in shareholder satisfaction
Immediate
decrease in shareholder satisfaction
Increasein share price due to potential for growth
Increase
in share price due to potential for growth
Guaranteedbetter financial performance compared to paying dividends
Guaranteed
better financial performance compared to paying dividends
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