The purchase of a company's shares on the TSX will
A) cause total shareholders' equity to increase.
B) cause total assets to decrease.
C) cause retained earnings to decrease.
D) have no effect on the operating activities of the corporation.

Question

Quizplus · Accepted Answer

The purchase of a company's shares on the Toronto Stock Exchange (TSX) by investors is a secondary market transaction, which means it occurs between investors and does not directly involve the company after the initial public offering. Therefore, it does not affect the company's balance sheet (shareholders' equity, total assets, or retained earnings) or its operating activities.

The Purchase of a Company's Shares on the TSX Will