What is the term that refers to the amount spent by a corporation to repurchase its own shares from stockholders?

Study for the WGU ACCT5000 C213 Accounting Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

The term that refers to the amount spent by a corporation to repurchase its own shares from stockholders is commonly known as a stock buyback amount. When a corporation engages in a stock buyback, it uses its available funds to purchase shares on the open market, which reduces the number of outstanding shares. This action can help increase earnings per share and potentially raise the stock price, benefiting remaining shareholders.

Understanding this concept is important as it is a strategic financial decision by the company that indicates confidence in its future prospects. Additionally, stock buybacks can be a way for a company to return value to its shareholders, similar to dividends. The other choices refer to different concepts in corporate finance; for example, capital expenditure relates to investment in physical assets rather than share repurchase.

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