If a Subsidiary Reacquires Its Outstanding Shares from Outside Ownership

question 39

Multiple Choice

If a subsidiary reacquires its outstanding shares from outside ownership for more than book value, which of the following statements is true?

• A) Additional paid-in capital on the parent company's books will decrease.
• B) Investment in subsidiary will increase.
• C) Treasury stock on the parent's books will increase.
• D) Treasury stock on the parent's books will decrease.
• E) No adjustment is necessary.

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Definitions:

Emotional Labour

Emotional labour refers to the process of managing one's feelings and expressions based on the emotional requirements of a job, often involving the suppression or induction of certain emotions.

Pay

The earnings given to an individual by an employer or client in return for their work or services, often specified as an hourly wage or salary.

Positive Emotions

Feelings that are generally uplifting and pleasant, such as joy, gratitude, serenity, interest, hope, pride, amusement, inspiration, awe, and love.

Interactional Fairness

The perceived fairness of the communication processes and interpersonal interactions by which organizational decisions are implemented and conveyed.