Which of the Following Is a Reason That a Company

question 56

Multiple Choice

Which of the following is a reason that a company would buy back its own shares in the market?

• A)To reduce cash and the number of shares outstanding
• B)To increase outstanding equity shares
• C)To have shares available to offer a merger target
• D)Both A and B

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Definitions:

Realized Gain

The profit earned from selling an asset for more than its purchase price, recognizable when the transaction is completed.

Trading Investments

Assets acquired primarily for selling in the near term to generate profit from short-term price fluctuations.

Interest Income

Interest income is the revenue earned from depositing funds in interest-bearing accounts, securities, or investments, where the yield comes in the form of interest payments.

Bond Premiums

The amount by which the market price of a bond exceeds its principal amount or face value, usually occurring when the market interest rate is below the coupon rate.