An increase in cash flows from financing activities will occur when a company distributes a stock dividend.

Question

Quizplus · Accepted Answer

An increase in cash flows from financing activities occurs when a company issues or repurchases stocks, issues or repays debt, or pays dividends to shareholders. When a company distributes a stock dividend, it does not result in a cash outflow and therefore does not affect cash flows from financing activities. Instead, it is reflected in the equity section of the balance sheet.

An Increase in Cash Flows from Financing Activities Will Occur