A Company May Reacquire Its Own Shares for All of the Following

question 32

Multiple Choice

A company may reacquire its own shares for all of the following reasons EXCEPT

• A) to increase trading in the company's shares in hopes of enhancing its market value.
• B) to reduce the number of shares issued thereby increasing earnings per share.
• C) to hold the shares as a long-term investment.
• D) to have additional shares available for use in the acquisition of other companies.

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Definitions:

IFRS

A collection of accounting principles formulated by the International Accounting Standards Board (IASB), known as International Financial Reporting Standards, which instruct on how financial statements should be prepared worldwide.

Minimum Lease Payments

The lowest total amount that a lessee is required to pay over the lease term, including both the principal and interest components.

Investment Property

Real estate property acquired to earn rental income, capital appreciation, or both, rather than for use in operations or as inventory.

Lease Revenue Recognition

The process of recognizing income earned from leasing out assets over the lease term.