Final answer:
Payment of dividends would come under the financing activity on the statement of cash flows.
Step-by-step explanation:
Payment of dividends would come under the financing activity on the statement of cash flows.
The statement of cash flows categorizes cash flows into three main activities: operating, investing, and financing. Dividends are considered a financing activity because they represent a distribution of profits to the stakeholders of a company. This activity involves the inflow and outflow of cash related to equity and debt financing, such as issuing and repurchasing stock, making debt payments, and paying out dividends.
Other examples of financing activities include issuing bonds, repaying loans, and raising capital through equity offerings. It focuses on the cash flows between the company and its investors or creditors.