CHAPTER 13: CORPORATIONS: ORGANIZATION, STOCK TRANSACTIONS, AND DIVIDENDS 3 A corporation reacquires 1,000 shares of its own $25 par common stock for $5,000, recording it at cost. What effect does this transaction have on stockholders' equity? a It increases stockholders' equity by $5,000. b It increases stockholders' equity by $25,000 c It reduces stockholders' equity by $5,000 It reduces stockholders' equity by $25,000. d