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1 February, 12:02

NewCorp has net income of $360. The firm pays out 35 percent of the net income to its shareholders as dividends. During the year, the company sold $81 worth of common stock. What is the cash flow to stockholders?

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  1. 1 February, 13:11
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    The cash flow to stockholders amounts to $45

    Explanation:

    Cash flow to stockholders is the term which is defined as the cash amount which the company pays out to the shareholders.

    The cash flow to stockholders is computed as:

    Cash flow to stockholders = Dividend paid - New equity raised

    where

    Dividend paid is computed as:

    Dividend paid = Net Income * %

    = $360 * 35%

    = $126

    New equity raised is $81

    So, putting the values above:

    Cash flow to stockholders = $126 - $81

    Cash flow to stockholders = $45
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Home » Business » NewCorp has net income of $360. The firm pays out 35 percent of the net income to its shareholders as dividends. During the year, the company sold $81 worth of common stock. What is the cash flow to stockholders?
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