Share issuance is shown as a use of a cash.
In the LOS that states the effects of share issuance, share repurchases and Dividends on FCFF and FCFE. (pg 219)
Is this some typo?
Share issuance is a source of cash.
If it’s described as a use of cash, it’s a typo.
I cant believe the amount of typos that are in Wiley for Level 2. I didnt seem to hae this problem in level 1.
Yeah, the statement is written incorrectly. The sentance should have left share issuance out of the statement, as it does in the curriculum. Basit wrote many of these readings a few years ago, back when it was still Elan, and I have a feeling he was his own editor at that time. Still, Wiley really should apply some resources and do some heavier editing I think. With that said, they ARE indeed fixing things. I just ran across something this morning that was corrected in this year’s guide from their 2015 study guide.
On the bright side, what is a use or source of cash is not point of that section, but rather that dividends, share repurchases and share issuances are transactions with shareholders and are excluded from calculating free cash flow (FCFF and FCFE).