A Company Pays Cash Dividends on Preferred Stock

A company pays cash dividends on preferred stock. If the company prepares the statement of cash flows using the indirect method or the direct method, where would this transaction appear?

A) The payment of cash dividends would be presented in the financing activities section as a cash payment under both methods.
B) The payment of cash dividends would be presented in the investing activities section as a cash payment under both methods.
C) The payment of cash dividends would be presented in the operating activities section as a reduction in net income under the indirect method and as a cash payment under the direct method.
D) The payment of cash dividends would be presented in the non-cash investing and financing activities section under both methods.