Net income=$137,700

Finance Sep 13, 2020

Net income=$137,700. 35% of net income is distrubited as a dividend payment. New common stock was sold to stockholders for $85,500. What was cash flow to stockholders?

Expert Solution

Computation of the cash flow to stockholder's:-

Net cash flow to stockholders = Dividends distributed - Net new equity

= ($137,700 * 35%) - $85,500

= $48,195 - $85,500

= -$37,305

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