The Acquisition of Treasury Stock by a Subsidiary from Noncontrolling

question 33

Multiple Choice

The acquisition of treasury stock by a subsidiary from noncontrolling shareholders at a price above book value

• A)decreases the parent's share of subsidiary book value and decreases the parent's ownership percentage.
• B)decreases the parent's share of subsidiary book value and increases the parent's ownership percentage.
• C)increases the parent's share of subsidiary book value and decreases the parent's ownership percentage.
• D)increases the parent's share of subsidiary book value and increases the parent's ownership percentage.

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Definitions:

Price Floor

A minimum price set by regulation or agreement, preventing prices of goods or services from dropping below this threshold, aimed at supporting producers.

Equilibrium Price

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in market balance.

Surplus

A condition where the quantity supplied of a product exceeds the quantity demanded at the market price.

Rent Control

A government policy or law that limits the amount landlords can charge for leasing a home or apartment to prevent rapid increases in housing costs.