Cash flow to equity holders is defined as:
A)the total dividends paid.
B)the cash flow from assets plus the cash flow to creditors.
C)cash dividends plus repurchases of equity minus new equity financing.
D)repurchases of equity less cash dividends paid plus new equity sold.
E)the net change in common stock and capital surplus.

Question

Quizplus · Accepted Answer

Cash flow to equity holders is the amount of cash paid out to shareholders in the form of dividends and share repurchases, minus any cash received from issuing new shares. This is calculated as cash dividends plus repurchases of equity minus new equity financing. Therefore, option C is the correct answer. The other options do not accurately represent cash flow to equity holders.

Cash Flow to Equity Holders Is Defined As