Cash flow from Financing Activities includes :

(A) Issue of Equity shares to promoters
(B) Redemption of Preference shares at premium
(C) Interest on debenture paid
(D) Raising funds by issuing 9% Debentures
(E) Payment for purchase of Equity shares

Choose the correct answer from the options given below :

(B), (C) and (D) Only

The correct answer is Option (2) - (B), (C) and (D) Only.

(A) Issue of Equity shares to promoters- Shares are issued to promoters for their services to the company. There is no use of cash in this transaction.

(B) Redemption of Preference shares at premium- Shares are redeemed at premium means company gives money back to the shareholders which reduces the cash. Redeeming shares is a part of financing activity.

(C) Interest on debenture paid- Interest paid on debentures is a part of financing activity.

(D) Raising funds by issuing 9% Debentures- Raising  funds for the company is a financing activity.

(E) Payment for purchase of Equity shares- Purchasing equity shares of other companies is an investing activity as company invest in other company shares for the capital appreciation and earning dividend.