Which of the Following Statements Correctly Describes a Treasury Stock

question 94

Multiple Choice

Which of the following statements correctly describes a treasury stock transaction?

• A)A treasury stock purchase for less than the amount of the stock's original issue cost results in a decrease in total stockholders' equity.
• B)A treasury stock purchase for less than the amount of the stock's original issue cost results in an increase in total stockholders' equity.
• C)A treasury stock purchase for an amount equal to the amount of the stock's original issue cost results in no change to total stockholders' equity.
• D)A treasury stock purchase for more than the amount of the stock's original issue cost results in an increase in total stockholders' equity.

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Definitions:

Remedy

A form of legal redress used to enforce a right or compensate for harm or injury caused by the breach of a legal duty.

Unconscionability

A doctrine in contract law that allows courts to refuse the enforcement of contracts that are grossly unfair or oppressive, due to a significant imbalance in power or information.

Unequal Bargaining Power

A situation where one party in a negotiation has significantly more leverage, influence, or power over the other.

Building Material

Building material refers to any substance used in the construction of buildings, such as wood, concrete, metal, or glass.