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leva [86]
4 years ago
15

Kleister Company issues bonds for $100 million and repays a long-term notes payable of $10 million. The company also sells its o

wn shares for $12 million and pays cash dividends of $5 million. Cash inflows from financing activities will be:________
Business
1 answer:
antoniya [11.8K]4 years ago
6 0

Answer:

$97 million cash inflow from financing activities.

Explanation:

Given: Company issue bonds for $100 million

           Repay long term notes payable is $10 million.

           Company sell its own shares= $12 million

           Pay cash dividend= $5 million.

Now, lets calculate the cash inflow from financing activities (CFF)

∴ Formula; Cash inflow from financing activities= \textrm{cash inflow from issuing equity or debt -(cash paid as dividend +repurchase of debt and equity)}

Cash inflow are the item through which cash is flowing in the company.

∴ cash inflow= (\textrm{(cash inflow issuance of bonds and selling own shares)}

Cash inflow= (100+12)= \$ 112\ million

Cash inflow from financing activities= 112-(10+5)= 112-15

Cash inflow from financing activities is $97 million

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