The following quotes are from The Wall Street Journal. RJR Nabisco Inc. said it plans to buy back as much as 8 percent of its outstanding stock for $52 to $58 dollars per share, or up to $1.2 billion. Analysts said the move probably signals that the tobacco andfood giant has decided not to acquire another company. It also is an appar¬ ent effort to bolster the price ofRJR shares, which like other tobacco stocks, have lagged the market... Earnings [pershare] will go up ... and thefear ofdilutive acquisition will be down. John Hegler, The Wall Street Journal, March 29, 1988, p. 8. Georgia-Pacific Corp.’s Board authorized an ambitious buy-back program that could result in the purchase ofas much as 19 percent ofthe company’s stock. The action will boost the forest products giant’s debt but is meant to bolster its stock price ... To accommodate the buy-back, Georgia-Pacific’s Board approved raising the company’s debt/equity target ratio of40 percent to 45 percentfrom its current 30 percent to 35 percent. John Hegler, The Wall Street Journal, March 30, 1988, p. 25. Charter 12 Stockholders’ Equity 637 Gillette Co. . . . said it will accelerate a stock buy-back program and purchase as many as 11 million of its shares on the open market during the next few months . . . Moody’s Investors Service said it placed Gillette’s . . . long-term debt ratings . . . under reviewfor possible down¬ grade because of Gillette’s stock buy-back acceleration. David Stuff, The Wall Street Journal, April 20, 1988, p. 32. REQUIRED: Explain how a treasury stock purchase could accomplish the following:

a. Bolster a company’s stock price per share and its earnings per share.

b. Reduce the threat of a dilutive acquisition.

c. Cause a company to boost its debt and result in an increase in its debt/equity ratio.

d. Cause a credit-rating service to downgrade a company’s credit rating.