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4 November, 19:37

At the beginning of the year, Vendors, Inc., had owners' equity of $51,800. During the year, net income was $7,900 and the company paid dividends of $5,200. The company also repurchased $9,800 in equity. What was the cash flow to stockholders for the year

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  1. 4 November, 23:37
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    The correct answer is $15,000.

    Explanation:

    According to the scenario, the given data are as follows:

    Owner's equity = $51,800

    Net income = $7,900

    Dividends paid = $5,200

    Equity repurchased = $9,800

    So, we can calculate the cash flow to stockholders by using the following formula:

    Cash Flow = Equity Repurchase + Dividends Paid - New issue of shares

    = $9,800 + $5,200 - $0

    = $15,000

    Hence, the cash flow to stockholders for the year was $15,000.
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