Paying Dividends to Its Stockholders Causes a Company's Stockholders' Equity

question 107

True/False

Paying dividends to its stockholders causes a company's stockholders' equity to decrease.

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Definitions:

Financing Activities

These pertain to transactions involving raising capital and repaying it to investors, including the payment of dividends, in the statement of cash flows.

Common Stock Cash Dividend

A payment made to shareholders out of a company's earnings, specifically to common stockholders.

Treasury

Pertains to the management of an organization's revenues, expenditures, and investment strategies, often associated with government or corporate finance.

Authorized

Officially permitted or agreed upon, often referring to the maximum number of shares a corporation is legally allowed to issue.