A Corporation May Wish to Repurchase Some of Its Shares

question 67

Multiple Choice

A corporation may wish to repurchase some of its shares in the market for all the following reasons except:

• A) this action might maximize after-tax benefit to shareholders.
• B) the corporation's executives will financially benefit if the shares are resold later at a substantial profit.
• C) it can stabilize or increase the market price of the stock.
• D) the stock may be needed for an employee compensation plan.

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Definitions:

Process Costing

A method of costing used mainly in manufacturing where costs are assigned to batches or work units, useful for homogeneous products.

Work In Process Inventory

Items in production that are not yet finished goods, representing a stage between raw materials and finished products.

Job Order Costing

An accounting method used to track costs, revenue, and profitability of individual jobs or projects.

Direct Labor

The expenditure on the pay of staff members directly participating in the production of goods or delivery of services.