Question

Which of the following will be a source of cash flows for a shareholder of a certain​ stock? I. Sale of the shares at a future date II. The firm in which the shares are held paying out cash to shareholders in the form of dividends III. The firm in which the shares are held increasing the total number of shares outstanding through a stock split A. I only B. II only C. I and II D. II and III

Answer 1

C

Step-by-step explanation:

Ownership of a stock in a company gives the holder of the share the right to receive dividends.

dividends are a portion of the firm's earnings that are paid out to shareholders.

also, if the shareholder decides to sell his shares in the future, the shareholder would receive cash in exchange for his shares.

a stock split is when the company decides to increase the number of shares outstanding by a certain number. e.g. a 2 for 1 split. in a stock split, there is no cash flow.