Declaration of a Cash Dividend on Common Stock Affects Cash

question 110

Short Answer

Declaration of a cash dividend on common stock affects cash flows from operating activities under the direct and indirect methods as follows:

---

Definitions:

Cumulative Items

The accumulation or sum of items over a period.

Unidimensionality

A Guttman scale consists of a single (low to high) dimension. It is also cumulative; that is, agreement with the highest-scoring item implies agreement with all lower-scoring items.

Bogus Pipeline Technique

A psychological technique used in social research to elicit honest responses from participants by falsely claiming the existence of a lie-detector-like mechanism.

Hierarchies

Systems or organizations in which members are ranked one above the other according to status or authority.