Treasury Stock Is Often Purchased for All of the Following

question 31

Multiple Choice

Treasury Stock is often purchased for all of the following reasons except:

• A) to distribute at a later date in connection with an employee incentive plan.
• B) to avoid a hostile takeover.
• C) to maintain or increase market value for the company stock.
• D) to increase stockholders' book value per share.

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Definitions:

Parol Evidence Rule

A rule in contract law that prevents parties from presenting evidence of prior or contemporaneous agreements that would contradict the written terms of the contract.

Oral Contracts

Agreements made through spoken communication that are binding, albeit harder to prove than written contracts.

Prenuptial Agreements

Legal contracts entered into before marriage, outlining the division of assets should the marriage end in divorce.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the parties involved to be enforceable.