Which of the following is correct?
A) Common equity = Common stock + retained earnings + treasury stock.
B) Common equity = Common stock - retained earnings - treasury stock.
C) Common equity = Common stock + retained earnings - treasury stock.
D) Common equity = Common stock - retained earnings + treasury stock.

Question

Quizplus · Accepted Answer

Common equity is calculated as the sum of common stock and retained earnings minus treasury stock. Treasury stock represents shares bought back by the company, thus reducing equity.

Which of the Following Is Correct