Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Dividends and Dividend Preferences

Financial Accounting

12. Stockholders' Equity

Dividends and Dividend Preferences

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

In calculating cash flow to stockholders, dividends paid are (minus/plus) net new equity raised. Which operation correctly completes the formula?

minus

plus

Previous problemNext problem

Verified step by step guidance

Understand the concept: Cash flow to stockholders represents the net cash distributed to shareholders during a period. It is calculated by subtracting net new equity raised from dividends paid.

Recall the formula: Cash Flow to Stockholders = Dividends Paid - Net New Equity Raised.

Break down the components: Dividends Paid refers to the cash distributed to shareholders, while Net New Equity Raised represents the cash inflow from issuing new shares.

Apply the operation: Since issuing new equity brings cash into the company, it reduces the net cash distributed to stockholders. Therefore, subtracting Net New Equity Raised from Dividends Paid is the correct operation.

Verify the logic: Subtracting Net New Equity Raised ensures the formula accurately reflects the cash flow to stockholders, accounting for both cash outflows (dividends) and inflows (new equity raised).