If a ﬁrm's cash ﬂow to stockholders is negative, then total dividends must have exceeded the value
of net new equity sold by the ﬁrm during the year.

Question

Quizplus · Accepted Answer

A negative cash flow to stockholders means that the firm has either paid out more in dividends than it raised from selling new equity or it has repurchased more stock than it issued, not necessarily that dividends exceeded new equity.

If a ﬁRm's Cash ﬂOw to Stockholders Is Negative, Then