Please refer to the following information for Peartree Company:
If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, the total equity of the company will go up by $18,000.

Question

Please refer to the following information for Peartree Company:
  If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, the total equity of the company will go up by $18,000.

Quizplus · Accepted Answer

Purchasing treasury stock does not increase the equity of the company. It only reduces the total number of outstanding shares, which may indirectly increase the earnings per share and the price per share of the remaining outstanding shares.

Please Refer to the Following Information for Peartree Company