Asked by Laura Arrunada on Jul 17, 2024
Verified
Cash flow from assets is equal to which of the following?
A) Cash flow to creditors - cash flow to shareholders
B) Cash flow to shareholders + cash flow to creditors
C) Cash flow to creditors + cash flow to the government
D) Cash flow to shareholders - net new borrowing
E) Cash flow to shareholders + operating cash flow
Cash Flow From Assets
The total amount of money being transferred in and out of a company's operations, investments, and financing, specifically relating to its assets.
Cash Flow To Creditors
The amount of cash companies pay to their creditors and lenders, including payments for interest and principal on debt.
Cash Flow To Shareholders
Dividends paid out by a firm less net new equity raised.
- Decode the notion of free cash flow and its critical role in an organization's financial strategy.
- Grasp the basics of cash flows to stakeholders including shareholders and creditors.
Verified Answer
AY
Amudha YazhiniJul 21, 2024
Final Answer :
B
Explanation :
Cash flow from assets is the total of cash flow to creditors (interest and net new borrowing) and cash flow to shareholders (dividends and net new equity), reflecting the total cash generated by the assets of the company that is distributed to both creditors and shareholders.
Learning Objectives
- Decode the notion of free cash flow and its critical role in an organization's financial strategy.
- Grasp the basics of cash flows to stakeholders including shareholders and creditors.