Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding

The following is the stockholders$$ equity section from Chipotle Mexican Grill, Inc.$$s balance sheet $($in thousands, except per share data$).$

Shareholders' Equity December

$31,2014$

Preferred stock, $$0\mathrm{.}01$ par value, $600,000$ shares authorized, no shares issued as of $$

December $31,2014$

Common stock, $$0\mathrm{.}01$ par value, $230,000$ shares authorized, and $35,394$ shares

issued as of December $31,2014354$

Additional paid$-$in capital $1,038,932$

Treasury stock, at cost$,4,367$ common shares at December $31,2014(748,759)$

Accumulated other comprehensive income $($loss$)(429)$

Retained earnings $1,722,271$

Total shareholders' equity $2,012,369$

a$.$ Show the computation to derive the $$354$ thousand for common stock.

Answer

$35,394$

shares X $Answer

$0\mathrm{.}01$

$=$ Answer

$353\mathrm{.}94$

thousand $($round to the nearest whole number$)$

b$.$ At what average price has Chipotle issued its common stock?

Round to two decimal places.

$Answer

$29\mathrm{.}36$

c$.$ How many shares of Chipotle common stock are outstanding as of December $31,2014?$

Answer

$31,027$

thousand

d$.$ At what average cost has Chipotle repurchased its treasury stock as of December $31,2014?$

Round to two decimal places.

$Answer

$171\mathrm{.}46$

e$.$ Select the incorrect reason as to why a company would want to repurchase its own stock.

To offset the dilutive effects of shares issued to employees under stock option plans.

To raise capital for fund future long$-$term projects.

To mitigate a takeover threat by concentrating the remaining shares in $$friendly hands.$$

To send a signal to the market that the company feels its shares are undervalued.