Answer (B) is correct . Financing activities include, among other things, obtaining resources from owners and providing them with a return on, and a return of, their investment. Consequently, the payment of cash dividends to providers of common equity financing is a use of cash that appears in the financing section of the statement of cash flows.
Answer (A) is incorrect because The payment would be in the financing, not operating, section.
Answer (C) is incorrect because Dividends appear in the financing, not investing, section.
Answer (D) is incorrect because Dividends appear in the financing, not investing, section.
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