Asked by Pyper Mortenson on May 31, 2024
Verified
Cash flow to stockholders is equal to _____________.
A) Net income.
B) Dividends paid.
C) Net new equity.
D) Dividends paid minus net new equity.
E) Dividends paid minus interest paid.
Net New Equity
The amount of equity capital that is generated by a company through the sale of new shares, after deducting any costs associated with issuing the new equity.
Dividends Paid
The portion of a company's earnings distributed to shareholders, usually on a regular basis.
- Gain insight into the fundamentals of cash flow operations in a business, specifically relating to disbursements to equity holders and debt financiers.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
D
Explanation :
Cash flow to stockholders is calculated as dividends paid minus net new equity raised. This reflects the net cash that flows from the company to its stockholders, taking into account both the cash distributed to them and any new equity capital the company has raised from them.
Learning Objectives
- Gain insight into the fundamentals of cash flow operations in a business, specifically relating to disbursements to equity holders and debt financiers.