Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding Following is the stockholders’ equity section of the 2015 Caterpillar Inc. balance sheet.

Stockholders’ Equity ($ millions) 2015 2014 2013 Common stock of $1.00 par; Authorized shares: 2,000,000,000;

Issued shares (2015, 2014, and 2013—814,894,624 shares)

at paid-in amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,238

$ 5,016

$ 4,709 Treasury stock (2015: 232,572,734; 2014: 208,728,065; and 2013: 177,072,282 shares) at cost . . . . . . . . . . . . . . . . . . . . . . . . . .

(17,640)

(15,726)

(11,854)

Profit employed in the business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,208 33,887 31,854 Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . (6,997) (6,431) (3,898)

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 80 67 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,885 $16,826 $20,878

a. How many shares of Caterpillar common stock are outstanding at year-end 2015?

b. What does the phrase “at paid-in amount” in the common stock account mean?

c. At what average cost has Caterpillar repurchased its stock as of year-end 2015?

d. Why would a company such as Caterpillar want to repurchase its common stock?

e. Explain how CAT’s “issued shares” remains constant over the three-year period while the dollar amount of its common stock account increases.