What effect does the purchase of treasury stock have on the equity of a company?
Question:
Step by Step Answer:
The purchase of treasury ...View the full answer
Related Video
Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
Students also viewed these Accounting questions
-
What effect does the purchase of buildings financed by mortgage have on (1) times interest earned, (2) debt ratio, (3) debt/equity ratio and (4) debt to tangible net worth. assume initial time...
-
What effect does the purchase of virtual currencies have on a nation's monetary base, M2 money supply, and M2 money multiplier?
-
What effect does the issue of common stock have on the accounting equation?
-
A Ltd acquired a 60% shareholding interest in B Ltd in 20x4. B Ltd acquired a 30% shareholding interest in C Ltd in 20x5. A Ltd acquired a 30% shareholding interest in C Ltd in 20x6. For the year...
-
Assume that a company issues a bond at 92 having a face value of $5,000 and a coupon interest rate of 6%. The bond pays interest annually and has a five-year-maturity time frame, and bonds of similar...
-
Leons Furniture Ltd. is one of Canadas largest retailers, selling a wide range of merchandise, including furniture, major appliances, and home electronics. A recent statement of financial position...
-
appraise the means for creating environments that foster both ethical and unethical behavior,
-
Selected data for Richmond Company for 2011 and additional information on industry averages follow. Required a. Calculate and compare Richmond Company's ratios with the industry averages. b. Discuss...
-
use the chain rule to find the indicated partial derivatives * = wtan" ( uv ) , u = rts , v= stt , w = ter d Y d x , dy when v - 4 , 5 = 5, 1 =- 4 d s dy z ds
-
On November 1, Able Corporation purchased a six-month insurance policy from The Baylor Agency for $3,000. a. Prepare the necessary adjusting entry for Able Corporation on November 30, assuming it...
-
Why might a company repurchase its own stock?
-
Assume that Day Company repurchased 1,000 of its own shares for $30 per share and sold the shares two weeks later for $35 per share. What is the amount of gain on the sale? How is it reported on the...
-
Copper Company has four employees, and each employee earned $40,000 for the calendar year. Using a blank Form 940, complete Part 2, lines 38, to answer the following questions: Total employees during...
-
What is the critical angle for light bouncing off a fish in water of nw = 1.35 and the air above having an index of na = 1.00?
-
12. Clinton corp operates in an industry for which NOL carrybacks is not allowed, and had the following pretax income (loss) over its first four years of operations. 2018: 50,000 2019: 120,000 2020:...
-
Which of the two bonds below would you choose to invest in , assuming they have the same risk? a . 3 0 - year - to - maturity bond with a current price of $ 1 , 4 5 0 . 3 1 and paying 1 2 %...
-
SIMPLE PROCESS COSTING AND INCOMPLETE UNIT (CLOSING) Ultimate Sdn Bhd manufactures organic fertiliser by means of two successive processes, Process A and Process B. Below is the costs involved for...
-
Nahavandi (2022) indicates that culture is "stable and long-lasting while also being adaptable and dynamic" (p. 10). What are your thoughts on this statement? Please provide any examples to support...
-
A jet of water issuing from a stationary nozzle at \(10 \mathrm{~m} / \mathrm{s}\left(A_{j}=0.1 \mathrm{~m}^{2} ight)\) strikes a turning vane mounted on a cart as shown. The vane turns the jet...
-
A liquid flows upward through a valve situated in a vertical pipe. Calculate the differential pressure (kPa) between points A and B. The mean velocity of the flow is 4.1 m/s. The specific gravity of...
-
In the opening vignette, was it the correct decision for Sony to stop the initial release of The Interview? What message did that action send to the hackers? The movie industry? The actors? How would...
-
Gletchen Cough Drops operates two divisions. The following information pertains to each division for 2018. Required a. Compute each division's residual income. b. Which division increased the...
-
The manager of the Cranston Division of Wynn Manufacturing Corporation is currently producing a 20 percent return on invested capital. Wynn's desired rate of return is 16 percent. The Cranston...
-
Obtain the income statements for Target Corporation for the fiscal years ending in 2011, 2012, 2013, 2014, and 2015. Target's fiscal year ends near the end of January or the beginning of February....
-
During the fiscal year ended December 3 1 , 2 0 1 5 , the City of Johnstown issued 6 % general obligation serial bonds in the amount of $ 2 , 0 0 0 , 0 0 0 at 1 0 2 ( $ 2 , 0 4 0 , 0 0 0 ) and used $...
-
1 . 4 Comment on the following items over the tho - jear period. ( No ratios are required. ) 1 . 4 . 1 Non - curnent assels 1 . 4 . 2 Imventories ( 4 marks ) 1 . 4 . 3 Accounts receivatle INFORMATION...
-
Chapters 2 2 - 2 4 and Appendices D and B i Help Save & Ex price per unit under the variable cost method is: Multiple Choice $ 1 6 . $ 2 0 . $ 2 4 . $ 2 8 . 3 0 .
Study smarter with the SolutionInn App