If a Corporation Desires to Reacquire Some of Its Issued

question 201

Essay

If a corporation desires to reacquire some of its issued shares of stock, how would it accomplish this, i.e., how would the corporation determine which of its shares to buy back or from which stockholders?

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Definitions:

Vertical Equity

A principle in taxation that suggests taxpayers with a greater ability to pay should contribute more in taxes.

Ronald Reagan

The 40th President of the United States, serving from 1981 to 1989, known for his economic policies known as "Reaganomics".

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the proportion of any additional dollar of income that will be taken as tax.

Lump-Sum Tax

A tax that is a fixed amount, not dependent on the taxpayer's income level or assets' value.