Cash flow to stockholders is best defined as
A)the total dividends paid.
B)the cash flow from assets plus the cash flow to creditors.
C)cash dividends plus repurchases of equity minus new equity financing.
D)repurchases of equity less cash dividends paid plus new equity sold.
E)the net change in common stock and capital surplus.

Question

Quizplus · Accepted Answer

Cash flow to stockholders includes both cash dividends paid to stockholders and repurchases of equity minus any new equity financing. It represents the cash flow that is received by stockholders. Choices A and B only include dividends, whereas choice D includes new equity sold. Choice E is too broad and includes changes in both common stock and capital surplus.

Cash Flow to Stockholders Is Best Defined as