Stock That Was Reacquired and Is Still Held by the Issuing

question 81

Multiple Choice

Stock that was reacquired and is still held by the issuing corporation is called:

• A) Capital stock.
• B) Treasury stock.
• C) Preferred stock.
• D) Redeemed stock.
• E) Callable stock.

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Definitions:

CCA Method

The CCA (Capital Cost Allowance) method is a tax deduction approach allowing Canadian businesses to claim depreciation on tangible property over its useful life as part of calculating taxable income.

CCA Tax Shield

A deduction that allows businesses to depreciate the cost of capital assets over time against their taxable income, reducing the tax payable.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the proportion of additional income paid in taxes.

Relevant Discount Rate

The interest rate used to convert future payments or receipts into their present value, often reflecting the risk associated with the cash flows.