When common stock is repurchased and retired, the underlying motive is to ________.
A) delay taxes
B) boost the stock's dividends
C) distribute the excess cash to the owners
D) reduce the retained earnings balance

Question

Quizplus · Accepted Answer

Repurchasing and retiring common stock is often done to distribute excess cash to shareholders, as it reduces the number of shares outstanding, potentially increasing the value of remaining shares.

When Common Stock Is Repurchased and Retired, the Underlying Motive