or what reason might a company purchase treasury stock? To increase shareholder liquidity To execute an acquisition through a share exchange To increase the number of outstanding shares of stock To reduce future income taxes

or what reason might a company purchase treasury stock? To increase shareholder liquidity To execute an acquisition through a share exchange To increase the number of outstanding shares of stock To reduce future income taxes

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 3DQ

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Question

For what reason might a company purchase treasury stock?

To increase shareholder liquidity
To execute an acquisition through a share exchange
To increase the number of outstanding shares of stock
To reduce future income taxes

Definition Definition Stock repurchased from the stockholders by the company that once issued it. The repurchase of the stock reduces the stockholder's equity balance on the balance sheet. Treasury stocks are an important constituent of stockholder's equity but do not carry any voting rights.

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