-
AuthorPosts
-
-
-
Found the answer on Investopedia, but couldn’t find it in the Schweser Notes. I feel a little silly. I was totally overthinking it. :blush:
“Though investors may benefit from a share price increase, adding treasury stock will – at least in the short-term – actually weaken the company’s balance sheet. To grasp why this is the case, consider the basic accounting equation: Assets – Liabilities = Stockholder’s Equity. The organization has to pay for its own stock with an asset (cash), thereby reducing its equity by an equivalent amount.”
http://www.investopedia.com/articles/markets/013014/getting-acquainted-treasury-stock.asp
-
@shannondaily
lol
also, regarding your dividends paid part, dividends paid amount would be less than the price of the equity… -
-
-
AuthorPosts
- You must be logged in to reply to this topic.