Cash flow to stockholders must be positive when:
A)the dividends paid exceed the net new equity raised.
B)the net sale of common stock exceeds the amount of dividends paid.
C)no income is distributed but new shares of stock are sold.
D)both the cash flow to assets and the cash flow to creditors are negative.
E)both the cash flow to assets and the cash flow to creditors are positive.

Question

Quizplus · Accepted Answer

Cash flow to stockholders is calculated as dividends paid minus net new equity raised. It is positive when dividends paid exceed the net new equity raised.

Cash Flow to Stockholders Must Be Positive When