An investor owns 5,000 shares,which is 1% of a corporation's outstanding stock before a stock repurchase.The investor did not sell any of his stock during the 25,000 share repurchase.Which one of the following statements is correct?

Question

Quizplus · Accepted Answer

When a company repurchases its own shares, the total number of outstanding shares decreases. Since the investor did not sell any shares, their ownership percentage increases because the denominator (total shares) has decreased.

An Investor Owns 5,000 Shares,which Is 1% of a Corporation's