Indicate Whether Each of the Following Statements About Treasury Stock

question 71

Essay

Indicate whether each of the following statements about treasury stock is true or false.
_____ a) One reason for a corporation to buy its own stock is to boost its net income when treasury stock is reissued for a higher price.
_____ b) Corporations may buy back their own stock (treasury stock) to avoid hostile takeovers.
_____ c) Purchasing treasury stock reduces the number of issued shares.
_____ d) The treasury stock account is classified as a negative equity account.

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Definitions:

Stereotype

A common yet rigid and overly simplistic representation or belief about a certain group or object, usually formed from insufficient information.

Fundamental Attribution Error

A common bias in social psychology where people tend to overemphasize personality traits and underestimate situational factors when explaining others' behaviors.

Confirmation Bias

The habit of scouting for, construing, preferring, and recalling insights in a manner that upholds one's antecedent beliefs or guesses.

Stereotype

Overgeneralized and oversimplified beliefs about a group of people based on their membership in that group.