Respuesta :
Advantages of using retained earnings for financing include;
Saving on debt interest payments
Saving on underwriting fees on stock and bond issues
No new ownership due to stock sale
What is the importance of using retained earnings?
Retained earnings are defined as the cumulative profits that remain after a company pays dividends to its shareholders. These funds may be reinvested back into the business by, for example, purchasing new building equipment's or down payments for debts.
Thus, formula for retained earnings is;
RE = RE_{0} - NI - D
where;
RE = retained earnings
RE_{0} = beginning retained earnings
NI = net income profit or loss
D = dividend
From the above we can deduce that the advantages of using retained earnings for financing include;
Saving on debt interest payments
Saving on underwriting fees on stock and bond issues
No new ownership due to stock sale
Read more about Retained Earnings at; https://brainly.com/question/25631040
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