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Author Question: Written approval takes the form of a signature or initials on a document to indicate that the proper ... (Read 167 times)

mynx

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on: Jul 5, 2018
Written approval takes the form of a signature or initials on a document to indicate that the proper person has authorized the event.
  Indicate whether the statement is true or false

Question 2

Why do corporations purchase and own treasury stock?
 
  What will be an ideal response?


djpooyouma

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Reply #1 on: Jul 5, 2018
Answer to Question 1

T

Answer to Question 2

Corporations purchase and hold treasury stock in order to have shares available to distribute to employees for compensation plans. Corporations may buy stock to distribute cash to owners who choose to sell their stock. Treasury stock can also be used to increase a corporation's earnings per share by reducing the number of shares outstanding. In addition, by keeping stock in the corporate treasury, companies can reduce the amount of future cash dividends to be paid and the risk of a hostile takeover.


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