The Purchase of Treasury Stock Will Result in

question 192

Multiple Choice

The purchase of treasury stock will result in

• A) no net changes in assets,liabilities,or stockholders' equity.
• B) a decrease in assets and a decrease in stockholders' equity.
• C) an increase in assets and an increase in liabilities.
• D) an increase in assets and an increase in stockholders' equity.

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Definitions:

Price Appreciation

refers to an increase in the value of an asset over time, typically evidenced by a higher market price.

Securities

Financial instruments that represent ownership positions in publicly traded corporations (stock), creditor relationships with governmental bodies or corporations (bonds), or rights to ownership as represented by an option.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Expected Inflation Rates

The anticipated rate at which the general level of prices for goods and services will rise over a period of time.