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week 4 discusion 2

Problem Statement / Requirements:

Paid-in capital shows how much owner's capital is invested in the business. Retained Earnings are earnings generated by the business. I see the importance in the fact that Paid-in Capital is the provision of capital to a business at start-up. Each shareholder has his stakes in the business, and will receive dividends based on shares held. Retained Earnings get booked each year and generate dividends. These numbers cannot be mixed up, because they would complicate shareholders' EPS (earnings per share)
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