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    blr1012's Avatar
    blr1012 Posts: 1, Reputation: 1
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    #1

    Jul 10, 2009, 08:13 AM
    Finance and Accounting
    What would be the effects on cash and working capital if a business were to pay $2 million in dividends?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jul 10, 2009, 07:47 PM

    The answer to the first question is easy if you just think about it. What does happen to cash if you pay $2 million in dividends?

    As for working capital, think about the equation: current assets less current liabilities. What of that is affected by paying dividends? If you need to, make up some numbers for those two things and see what happens if you change the numbers.

    At least take a crack at answering this.
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