Ashton Company was experiencing financial difficulty late in the current year The company 's income was sluggish, and the market price of its common stock was tumbling On December 21, the company began to buy back shares of its own stock in an attempt to boost its market price per share and to impr...

a Companies sometimes purchase shares of their own common stock to help ...

Ashton Company was experiencing financial difficulty late in the current year. The company's income was sluggish, and

Question:

Ashton Company was experiencing financial difficulty late in the current year. The company's income was sluggish, and the market price of its was tumbling. On December 21, the company began to buy back shares of its own stock in an attempt to boost its market price per share and to improve its earnings per share.
a. Is it unethical for a company to purchase shares of its own stock to improve measures of financial performance? Defend your answer.
b. Assume that the company classified the shares of treasury stock as short-term investments in the current asset section of its balance sheet. Is this appropriate? Explain.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...