Where Do Dividends Paid by a Subsidiary to the Parent

question 55

Multiple Choice

Where do dividends paid by a subsidiary to the parent company appear in a consolidated statement of cash flows?

• A) Cash flows from operating activities.
• B) Cash flows from investing activities.
• C) Cash flows from financing activities.
• D) Supplemental schedule of noncash investing and financing activities.
• E) They do not appear in the consolidated statement of cash flows.

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Definitions:

Target's Shares

Equity stakes in the Target Corporation, a publicly traded company known for its retail operations.

Price

Exchange value of a good or service.

Leverage

The use of borrowed funds or other financial instruments to increase the potential return of an investment.

Potential Return

The expected gain or loss from an investment, taking into consideration both the risk and the expected rate of return.