Cash flow to shareholders is defined as:
A)interest payments.
B)repurchases of equity less cash dividends paid plus new equity sold.
C)cash flow from financing less cash flow to creditors.
D)cash dividends plus repurchases of equity minus new equity financing.
E)None of the above.

Question

Quizplus · Accepted Answer

Cash flow to shareholders is the cash payments made by the company to its shareholders, which includes cash dividends plus repurchases of equity minus new equity financing. Option D correctly represents this definition. Option A is incorrect because interest payments are considered cash flow to creditors. Option B is incorrect because it includes new equity sold, which is not considered cash flow to shareholders. Option C is incorrect because cash flow to creditors is not relevant in determining cash flow to shareholders.

Cash Flow to Shareholders Is Defined As