Reasons That a Company Would Purchase Treasury Stock Include

question 25

Multiple Choice

Reasons that a company would purchase treasury stock include:

• A)it needs the stock for distribution to employees under stock purchase plans.
• B)it wants to increase net assets by buying its stock low and reselling it at a higher price.
• C)management wants to avoid a takeover by an outside party.
• D)all of the above.

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Definitions:

Insurance Policy

A legal contract between an insurer and the insured, where the insurer agrees to compensate the insured for specific losses in exchange for a premium.

Adjusting Entry

An accounting record entry made at the close of an accounting period for the purpose of attributing costs and revenues to their appropriate periods.

Income Statement

A financial statement that displays a company's financial performance by detailing revenues, expenses, and net income over a certain period.

Balance Sheet

A Balance Sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, offering a snapshot of its financial condition.