Northern Express paid $85 in dividends and $110 in interest expense during a given year.During that same year,the firm issued $40 in new equity shares,issued new debt of $65,and repaid $23 of old debt.What is the cash flow to creditors for that year?
A)$152
B)$146
C)$237
D)$68
E)$46

Question

Quizplus · Accepted Answer

Cash flow to creditors is calculated as interest expense minus the change in long-term debt. In this case, cash flow to creditors is $110 - ($65 - $23) = $68.

Northern Express Paid $85 in Dividends and $110 in Interest