Cash flow to stockholders is defined as:
A)interest payments.
B)repurchases of equity less cash dividends paid plus new equity sold.
C)cash flow from financing less cash flow to creditors.
D)cash dividends plus repurchases of equity minus new equity financing.
E)None of the above.

Question

Quizplus · Accepted Answer

Cash flow to stockholders includes cash dividends paid out to stockholders, as well as any repurchases of equity (stock buybacks) that a company may have undertaken. It also takes into account any new equity financing that the company may have undertaken, as this impacts the overall cash available to stockholders. Therefore, choice D (cash dividends plus repurchases of equity minus new equity financing) is the best answer to this question.

Cash Flow to Stockholders Is Defined As