Advantage of falling interest rates


A company issues $1 million of new stock and pays $200,000 in cash dividends during the year. In addition, the company took advantage of falling interest rates to borrow $1.5 million in a new bond issue and paid off existing bonds with a face value of $2 million. The company bought 500 of another company's $1,000 bonds at a $100,000 premium. The net cash flow from financing activities?

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Accounting Basics: Advantage of falling interest rates
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