When a Company Pays More Than the Fair Market Value

question 81

Multiple Choice

When a company pays more than the fair market value to acquire treasury stock in order to prevent a takeover attempt, the "greenmail" from the transaction is recorded as a(n)

• A)expense
• B)additional paid-in capital reduction
• C)extraordinary loss
• D)retained earnings reduction

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Definitions:

Guilt

A feeling of responsibility or remorse for some offense, crime, wrong, whether real or imagined.

Shame

A painful emotion caused by a strong sense of guilt, embarrassment, unworthiness, or dishonor.

Withdrawal

The process or action of withdrawing, often referring to the physical and psychological reactions experienced when stopping or reducing the intake of a substance to which one has become addicted.

Child Abuse

Any action or lack of action by caregivers that results in harm or potential harm to a child, can be physical, emotional, sexual, or neglect.