Which activity is classified as an investing activity?

Investing activities include transactions that involve the purchase or sale of long-term assets or investments. These activities are essential for understanding how a company allocates its resources towards growth and expansion.

In this context, when cash is paid for the purchase of land, it represents an investment in a long-term asset that the company intends to use for its operations, development, or potentially resale. This type of transaction reflects a commitment of funds towards assets that will benefit the company over an extended period, aligning directly with the definition of investing activities.

The other options pertain to financing or operational activities rather than investing. Issuing common stock relates to financing the company through equity. Paying dividends is a return of capital to shareholders and does not involve the acquisition of assets. Borrowing funds from a bank is also a financing activity, as it involves obtaining funds, rather than using them to acquire lasting assets. Therefore, the payment of cash for the purchase of land distinctly fits the criteria for investing activities, highlighting its significance in the analysis of a company's financial position.