During 2010,Thomas Corporation repurchased some shares of its own common stock.What effect did this transaction have on 2010 stockholders' equity and earnings per share,respectively? $$\begin{array} { l l l }
& \text { Stockholders' Equity } & \text { Earnings Per Share } \
\text { A. } & \text { Decrease } & \text { No effect } \
\text { B. } & \text { Increase } & \text { No effect } \
\text { C. } & \text { Decrease } & \text { Decrease } \
\text { D. } & \text { Decrease } & \text { Increase }
\end{array}$$
A)Option A
B)Option B
C)Option C
D)Option D

Question

During 2010,Thomas Corporation repurchased some shares of its own common stock.What effect did this transaction have on 2010 stockholders' equity and earnings per share,respectively? $$\begin{array} { l l l } 
& \text { Stockholders' Equity } & \text { Earnings Per Share } \
\text { A. } & \text { Decrease } & \text { No effect } \
\text { B. } & \text { Increase } & \text { No effect } \
\text { C. } & \text { Decrease } & \text { Decrease } \
\text { D. } & \text { Decrease } & \text { Increase }
\end{array}$$
A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

Repurchasing shares decreases stockholders' equity because it reduces the number of outstanding shares, but it increases earnings per share as the earnings are distributed over fewer shares.

During 2010,Thomas Corporation Repurchased Some Shares of Its Own Common