Which transaction will cause an increase in cash flow for the corporation?
A) Preferred shares are exchanged for common shares.
B) The company issues common shares for equipment.
C) The company issues common shares.
D) One of the main shareholders sells his shares to his son.

Question

Quizplus · Accepted Answer

Issuing common shares results in the company receiving cash (or cash equivalents) from investors, which directly increases its cash flow. The other options do not involve an inflow of cash to the corporation.

Which Transaction Will Cause an Increase in Cash Flow for the Corporation