Cash flows from financing activities:
A)includes all cash inflows and outflows associated with a company's lending activities.
B)includes all cash inflows and outflows between a company and its stockholders.
C)are always negative because of the payments of cash dividends as well as interest and principal on debt.
D)are always positive unless the company is experiencing serious financial trouble.

Question

Quizplus · Accepted Answer

Cash flows from financing activities include all exchanges of cash with stockholders and cash exchanges with lenders (but only for principal on loans).Cash flows from financing activities do not include the payment of interest associated with lending activities.Unlike the operating and investing activities sections,where a healthy company typically shows positive and negative cash flows,respectively,the financing activities section does not have an obvious expected direction for cash flows.

Cash Flows from Financing Activities