Final answer:
The correct answer is option d. Option d, payment of cash dividends to stockholders, is an example of a cash outflow from a financing activity since it represents distribution of cash to owners.
Step-by-step explanation:
When considering which of the following is an example of a cash outflow from a financing activity, it is important to understand the nature of financing activities within a business context. Financing activities are transactions that involve changes in the equity and borrowings of a firm. The options given are:
- a. payment of interest on a note payable
- b. payment of wages to employees
- c. issuance of common stock for cash
- d. payment of cash dividends to stockholders
An outflow of cash from a financing activity typically involves the distribution of cash to owners or the repayment of equity or debt. Among the options provided, option d. payment of cash dividends to stockholders is a clear example of a cash outflow due to a financing activity. Issuance of common stock, as indicated in option c, is actually an inflow of cash, and thus not the correct choice. The payment of interest (option a) is generally considered an operating expense, and the payment of wages (option b) is also an operating activity, not a financing activity.
Therefore, the correct option in the final answer is d. payment of cash dividends to stockholders.