1. Define treasury stock/stock buyback.
  2. Explain accounting treatment of buy-backs, including purchase, subsequent sale and retirement of stock.
  3. Explain the impact buyback has on corporate cash, retained earnings, EPS and the stockholder and reasons

corporations buy their own stock.

4, Discuss the buyback’s implication on corporate financial strength and outlook.

  1. Discuss altematives that could improve financial strength.
  2. Proponents claim that buybacks are a means of distributing cash to stockholders. Explain and critique this position.

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