The payment of a dividend by an American company to a foreign stockholder represents:

Question

Quizplus · Accepted Answer

When a dividend is paid to a foreign stockholder, it represents an outflow of funds from the U.S. economy to the foreign economy. This outflow is recorded as a debit in the current account of the U.S. balance of payments, which measures the flow of goods, services, and income between the U.S. and other countries. Therefore, the correct choice is D, a debit in the U.S. current account. The other options are incorrect; a payment of dividend does not have any impact on the financial account or official reserve account.

The Payment of a Dividend by an American Company to a Foreign