Question

When common stock is repurchased and retired, the underlying motive is to ________.

Answer 1

Stock repurchase can substitute the cash dividend as a way to distribute funds to stockholders. When common stock is repurchased for retirement, the underlying motive is to distribute excess cash to the stockholders.

What is stockholders?

Any individual, business, or organization that holds at least one share of a company's stock or unit in a mutual fund is referred to as a shareholder. With specific rights and obligations, shareholders effectively own the business. They are able to benefit from a company's success thanks to this sort of ownership. These benefits take the form of rising stock prices or cash gains paid out as dividends. On the other hand, when a corporation experiences a loss, the share price always falls, which can result in financial losses for shareholders or declines in their portfolios. The duties dpe that come with being a shareholder

Any individual, organization, or entity that has stock in a firm is a shareholder.

An investor in a corporation is permitted to own just one share.

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