Peggy Grey's Cookies has net income of $360. The firm pays out 40% of the net income to its shareholders as dividends. During the year, the company sold $80 worth of common stock. What is the cash flow to stockholders?
A) $64.
B) $136.
C) $144.
D) $224. Cash flow to stockholders = .40($360) - $80 = $64

Question

Quizplus · Accepted Answer

Cash flow to stockholders is calculated by subtracting the cash raised by selling stock from the dividends paid out. Here, it's 40% of $360 (which is $144) minus the $80 from stock sales, resulting in $64.

Peggy Grey's Cookies Has Net Income of $360