Healthy Supplements, Inc. paid $6,300 in interest and $4,300 in dividends for the year. The firm also issued $12,000 worth of new equity securities. What is the amount of the financing cash flow?

Question

Quizplus · Accepted Answer

The financing cash flow is calculated as the cash inflow from issuing new equity ($12,000) minus the cash outflows for interest ($6,300) and dividends ($4,300), resulting in $12,000 - $6,300 - $4,300 = $1,400. However, the correct calculation should consider only dividends and new equity, leading to $12,000 - $4,300 = $7,700.