Which of the Following Will Be a Source of Cash

question 2

Multiple Choice

Which of the following will be a source of cash flows for a shareholder of a certain stock?
I. Sale of the shares at a future date
II. The firm in which the shares are held paying out cash to shareholders in the form of dividends
III. The firm in which the shares are held increasing the total number of shares outstanding through a stock split

• A) I only
• B) II only
• C) I and II
• D) II and III

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Definitions:

Assets

Resources owned by a business that are expected to provide future economic benefits.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Internal Transactions

financial events that affect the internal accounting of an organization without involving another entity.

External Transactions

Financial activities involving an entity and another party outside the entity, such as sales, purchases, and financing agreements.