Financing Activities Include Receiving Cash from Issuing Debt and Receiving

question 150

True/False

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuing company.

Net Income

The amount of profit left after all operating expenses, interest, taxes, and dividends have been deducted from total revenue.

Dividend Payout Ratio

The dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends, expressed as a percentage, showing the percentage of earnings distributed as dividends.

Market Price

This represents the price at which a commodity, security, or other financial instrument is traded on the open market and can be purchased or sold.