Which of the Following Is Not a Reason for a Corporation

question 100

Multiple Choice

Which of the following is not a reason for a corporation to acquire treasury stock?

• A)to reduce the likelihood of being acquired by another company
• B)to maintain the market price of the company's stock
• C)to reduce the earnings per share
• D)to be used in the acquisition of other companies

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Definitions:

Bond Premium

The amount by which the market price of a bond exceeds its par value, typically arising when the bond's interest rate is higher than the market rate.

Forward Contract

A customized financial agreement to buy or sell an asset at a specified future date at a price agreed upon today.

Future Date

A specified day in the future, often used in the context of agreements or financial transactions that will occur at a later time.

Amortized Historical Cost

The accounting method of gradually writing off the initial cost of an asset over a period, adjusting for depreciation or amortization.