How would the purchase of treasury stock affect the market price of a firm's common stock?
A)increase
B)decrease
C)no effect
D)increase or decrease depending on the number of shares purchased

Question

Quizplus · Accepted Answer

The purchase of treasury stock can lead to an increase in the market price of a firm's common stock because it reduces the number of shares available in the market, potentially increasing the stock's scarcity and perceived value.

How Would the Purchase of Treasury Stock Affect the Market