A potential investor interested in assessing a company's ability to pay dividends would be interested in which of the following cash flows?

Question

Quizplus · Accepted Answer

A potential investor interested in assessing a company's ability to pay dividends would be most interested in the company's cash inflows from operations, as this indicates the company's ability to generate cash from its core business activities. Cash outflows from investing and financing activities may also provide insights into the company's financial position, but these are not directly relevant to the company's ability to pay dividends. Cash outflows from financing activities, such as dividend payments, may also be of interest, but are not relevant to assessing the company's ability to continue paying dividends in the future.

A Potential Investor Interested in Assessing a Company's Ability to Pay