What is the benefit of paying dividends to shareholders rather than using retained earnings to expand?

This chapter explained corporate formation and corporate financing. When you complete your education, you may work in corporate finance directly, or you may become involved in starting a sole proprietorship. When the start-up is up and running and sales revenues are sufficient to pay for operating expenses, you may consider incorporating the business and then seeking financing for expansion. As you learned in your finance courses, a finance manager helps directors and upper management decide on the sources of additional funding for ongoing expenses or for growth.