If a Company Buys Back Shares, Which of the Following

question 64

Multiple Choice

If a company buys back shares, which of the following is TRUE?

• A)The company can record a gain or loss on the buy- back.
• B)Total equity will decrease.
• C)Total equity will increase.
• D)The number of issued shares will go up.

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Definitions:

Company Finance

Refers to the financial activities related to running a company, focusing on maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies.

Horizontal Analysis

An analytical technique in financial statement analysis where an item or line is compared over multiple periods to identify trends or patterns.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presented in a structured manner.

Percentage Analysis

A financial analysis tool that expresses each item within a financial statement as a percent of a base item, facilitating comparison.