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A company is planning a share repurchase programme with the following details:
* Repurchased shares will beimmediatelycancelled.
* The shares will be purchased at a premium to the market share price.
The current market share price is greater than the nominal value of the shares.
Which of the following statements about the impact of the share repurchase programme on the company's financial statements is correct?
Suggested Answer: B
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8 comments · newest first
TH
Therese
12 months ago
Shares will be cancelled after repurchase, just FYI.
TA
Tatum
1 year ago
Really? Charging the premium to the Income Statement seems off.
AN
Annabelle
1 year ago
No way the total equity stays the same!
RO
Rochell
1 year ago
I think the share capital will drop by the nominal value.
VE
Venita
1 year ago
The premium goes to retained earnings, right?
VI
Vi
1 year ago
Hmm, I'm a bit unsure about this one. I know software allocations are important, but I'm not sure of the exact process when the hardware is retired. I'll have to review my notes to see if I can figure out the right answer.
FA
Fanny
1 year ago
This looks straightforward. I'd start by defining the organization's objectives and then prioritize their initiatives to ensure the Salesforce implementation aligns with their goals.
SU
Suzi
1 year ago
I'm not entirely sure about the calculations, but I remember something about fixed and variable costs. Maybe it's better to choose option A since 5,000 seems like a dividing line for profit?