If a company buys back shares,which of the following is TRUE?

Question

Quizplus · Accepted Answer

When a company buys back shares, the number of outstanding shares decreases. This reduces the total equity of the company. Therefore, option A is correct. Option B is incorrect because total equity will decrease, not increase. Option C is incorrect because the number of issued shares decreases, not increases. Option D is incorrect because recording a gain or loss on the buy-back depends on the price at which the shares are bought back and sold, and it does not affect the total equity of the company.

If a Company Buys Back Shares,which of the Following Is