Question

Cash flow to stockholders is defined as: Multiple Choice cash flow from assets plus cash flow to creditors. operating cash flow minus cash flow to creditors. dividends paid plus the change in retained earnings. dividends paid minus net new equity raised. net income minus the addition to retained earnings.

Answer 1

Answer:

The answer is C. dividends paid minus net new equity raised.

Explanation:

Cash flow to stockholder is the amount of money a firm pays its equity holders(shareholders). To get the cash flow to stockholder, dividend paid is subtracted from new equity raised (i.e Dividends - new equity raised).

Note that if Dividend are paid in form of stock(stock Dividend), this is not treated as cash flow to stockholders because it is non cash transactions.