An investor in a local company receives a copy of the company's financial statements. The information clearly shows the company earned a profit in the last period, but the accompanying letter states investors will not receive a dividend at this time. Rather, the company intends to reinvest the money. The investor is confused about why he is not receiving a dividend. What concept does the investor need to understand?

Answer rating: 100% (QA)

The investor needs to understand the concept of reinvestment Companies may choose to reinves... View the full answer