Question

During the year, Eastern Gas Pipeline Co. issued 5,000 shares of preferred stock for $25 per share. This transaction is classified as .

Answer 1

Answer: B. Financing cash flow

Step-by-step explanation:

Financing cashflow activities are those that have to do with the capital raised for the operations of the business. Every cash transaction related to capital falls under Financing activities.

This includes transactions such as issuing shares such as the preferred shares in the question and debt instruments such as bonds. Dividends and treasury purchases also fall under here.