Which of the Following Statements Is False

question 67

Multiple Choice

Which of the following statements is false?

• A)A share dividend has no impact on cash.
• B)Repurchase of shares (treasury shares)and payment of cash dividends reduce cash flow from financing activities.
• C)Issuance of preferred shares would increase cash from financing activities.
• D)Repurchases of shares at prices lower than the average issue price result in profit for the issuing company because they are capital transactions,not operating transactions

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Definitions:

Operating Leverage Factor

A measure that assesses the degree to which a company can increase operating income by increasing revenue, highlighting the fixed versus variable costs structure.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Profit Increase

The growth in profit from one period to another, often measured as a percentage increase, indicating the company's improved financial performance.

Cost Volume Profit Analysis

An accounting method used to determine the breakeven point of sales and to estimate the effect of changes in costs and volume on a company's profit.