A Company Reacquires Its Own Shares During the Fiscal Year

question 72

Multiple Choice

A company reacquires its own shares during the fiscal year and reports the transaction in the theoretically correct manner.What effect will this transaction have on shareholders' equity and earnings per share,respectively?

• A) Increase and decrease
• B) Decrease and decrease
• C) Decrease and increase
• D) Increase and no effect

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Definitions:

Economic Responsibility

An entity's accountability for its impact on economic systems, including sustainable financial practices and contributions to economic development.

Goods and Services

Denote the tangible products and intangible offerings that fulfill the needs or wants of consumers, provided by businesses or individuals.

Defensive Strategy

A set of actions undertaken by a corporation to protect itself against potential threats or mitigate existing ones.

Corporate Social Responsibility

A business model that integrates self-regulation into its business model to ensure its operations adhere to laws, ethical standards, and international norms, often going beyond profit to include environmental and social welfare.