Indicate whether each of the following statements about treasury stock is true or false. ________ a) One reason for a corporation to buy its own stock is to boost its net income when treasury stock is reissued for a higher price.________ b) Corporations may buy back their own stock (treasury stock) to avoid hostile takeovers.________ c) Purchasing treasury stock reduces the number of issued shares.________ d) The treasury stock account is classified as a contra equity account.________ e) If treasury stock is reissued for an amount lower than its purchase price, retained earnings is increased.
What will be an ideal response?
a) F b) T c) F d) T e) F
a) This is false. Reissuing treasury stock does not impact net income.
b) This is true. Purchasing treasury stock keeps those shares away from the company attempting the takeover.
c) This is false. Purchasing treasury stock reduces the number of outstanding shares, but does not affect the number of issued shares.
d) This is true. Treasury stock is a contra equity account.
e) This is false. Retained earnings is decreased, not increased, for the difference between the reissue price and the cost of the stock.
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As a market follower, the ________ may choose to sell to different markets, but often it grows into a future challenger
A) imitator B) adapter C) cloner D) counterfeiter E) innovator
Securities must be registered under the 1933 Act or the 1934 Act for Rule 10b-5 to apply.
Answer the following statement true (T) or false (F)
The basis for measuring the cost of capital derived from bonds and preferred stock, respectively, is the
a. pre-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock. b. pre-tax rate of interest for bonds and stated annual dividend rate for preferred stock. c. after-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock. d. after-tax rate of interest for bonds and stated annual dividend rate for preferred stock.
______ are the structures and activities that provide stability to a society such as the family, education, economics, religious, and political systems.
Fill in the blank(s) with the appropriate word(s).