CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following should be classified as financing cash flow?

I. Purchase and sale of equity securities of other entities
II. Issuance of equity securities and reacquisition of capital stock
III. Payment of dividends
A. All of them
B. I and II
C. II and III
Explanation: Purchase of debt and equity securities of other entities (sale of debt or equity securities of other entities) and loans to other entities (collection of loans to other entities) are considered investing activities. However, issuance of debt (bonds and notes) and equity securities are financing cash inflows, and payment of dividends, redemption of debt, and reacquisition of capital stock are financing cash outflows.

User Contributed Comments 0

You need to log in first to add your comment.