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

Question

Quizplus · Accepted Answer

Cash flow to stockholders is positive when the dividends paid to them exceed any new equity raised, indicating a net outflow of cash to stockholders.

Cash Flow to Stockholders Must Be Positive When