All else constant, the cash flow to stockholders:

A) Decreases when the dividends per share are decreased.
B) Remains unchanged when the firm repurchases shares of outstanding stock.
C) Decreases when a firm decreases its degree of financial leverage.
D) Decreases when the cash flow from assets increases.
E) Decreases as the common stock account balance decreases.

Question

Shankeria Bishop · Accepted Answer

Final Answer : A, Explanation :  Cash flow to stockholders decreases when the dividends per share are decreased because the dividends represent the direct cash payments made to the stockholders. Reducing these payments directly reduces the cash flow to them.

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