Cash flow to stockholders must be positive when
A)the net sale of common stock exceeds the amount of dividends paid.
B)no income is distributed but new shares of stock are sold.
C)both the cash flow to assets and the cash flow to creditors are negative.
D)both the cash flow to assets and the cash flow to creditors are positive.
E)the dividends paid exceed the net new equity raised.

Question

Quizplus · Accepted Answer

Cash flow to stockholders is positive when the dividends paid out to shareholders exceed the net new equity raised by the company. This means the company is returning more money to its shareholders than it is receiving from issuing new shares.

Cash Flow to Stockholders Must Be Positive When