The Retirement of Callable Bonds at an Amount Below Face

question 48

Multiple Choice

The retirement of callable bonds at an amount below face value would appear on a statement of cash flows as an:

• A)outflow in the financing activities section.
• B)inflow in the financing activities section.
• C)outflow in the operating activities section.
• D)inflow in the operating activities section.

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Definitions:

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders at no extra cost.

Stock Split

A corporate action increasing the number of shares issued and outstanding, by issuing more shares to current shareholders proportionally, effectively reducing the price per share.

Common Stockholders

Individuals or entities that own a portion of a corporation's equity and have voting rights based on their share ownership.

Shares Outstanding

The total number of shares of a company's stock that are currently owned by investors, including those held by the public as well as restricted shares owned by the company's insiders and employees.