The alternative use of retained earnings is based on ______________.

Internal-yield criterion

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External-yield criterion

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Long-run criterion

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Short-run criterion

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Solution

The correct option is C External-yield criterion
Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders. The decision to retain the earnings or to distribute it among the shareholders is usually left to the company management.

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