“When companies repurchase their own shares, the accounting depends on the purpose for which the shares are purchased.” Explain.
Answer to relevant QuestionsWhy might a board of directors voluntarily restrict its dividend-declaring power?Why might a company decide to buy back its own shares instead of paying additional cash dividends? The Prohibition on Income Recognition from trading in the Company’s Shares your friend has considered stock repurchases. He thinks that it is proper for the company to buy its own shares and subsequently reissue them, ...On January 1, 2013, Lyndon Systems granted its top executives options to purchase 6,000 shares of common stock (par $2) at an exercise price of $20 per share, the market price on January 1. The options have an estimated fair ...Indicate the effect (+, –, or 0) on total stockholders’ equity of McKenzie Services Corporation for each of the following: 1. Declaration and issuance of a stock dividend on common stock 2. Sale of 100 shares of McKenzie ...
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