Question: Xerox was not having a particularly pleasant year. The company??s stock price had already fallen in the previous year from $60 per share to $30.

Xerox was not having a particularly pleasant year. The company??s stock price had already fallen in the previous year from $60 per share to $30. Just when it seemed things couldn??t get worse, Xerox??s stock fell to $4 per share. The data below were taken from the statement of cash flows of Xerox. All dollars are in millions.

$ (663) (644) Cash used in operating activities Cash used in investing

InstructionsAnalyze the information above, and then answer the following questions.(a) If you were a creditor of Xerox, what reaction might you have to the above information?(b) If you were an investor in Xerox, what reaction might you have to the above information?(c) If you were evaluating the company as either a creditor or a stockholder, what other information would you be interested in seeing?(d) Xerox decided to pay a cash dividend. This dividend was approximately equal to the amount paid in the previous year. Discuss the issues that were probably considered in making thisdecision.

$ (663) (644) Cash used in operating activities Cash used in investing activities Financing activities Dividends paid Net cash received from issuing debt Cash provided by financing activities $ (587) 3,498 2,911

Step by Step Solution

3.52 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a Creditors lend money to companies with the expectation that they will be repaid at a specified poi... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

48-B-A-F-S (197).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Related Book