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16 April, 12:17

Which one of the following represents a cash outflow from a corporation? Multiple Choice Issuance of new securities Payment of dividends New loan proceeds Receipt of tax refund Initial sale of common stock

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  1. 16 April, 15:21
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    B) Payment of dividends

    Explanation:

    Dividend is the reward, (which can either be cash or non-cash) paid by a corporation out of profit or reserve at the end of a period to its shareholders. This share of profit is a reward received by investors as a result of their investment in a corporation

    Where dividend is paid out of the cash asset of the corporation, it will represent cash outflow from the corporation.

    Sometimes a corporation will want to save money by paying script dividend (i. e. share dividend) such does not involve cash outflow, but issue of shares.
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