When Muffy's muffins had net income of $2,570, where the firm retains 55 percent of net income, and during the year, the company sold $505 in common stock, the common cash flow to the shareholders will be $1661.5. Therefore, the option C holds true.
Cash flow can be referred to or considered as the total amount of cash and cash equivalents received or made by a firm during a given financial period.
On net income of $2,570, the dividend payment to the shareholders will be $1156.5, and the common stock worth $505 was sold, thereby generating a cash flow of $1,156 + $505 = $1,661.5.
Therefore, the option C holds true and states regarding the significance of cash flow.
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The missing options to the incomplete question have been added below for better reference.
A. 1156.5
B. 651.5
C. 1661.5
D. 2570
