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What are the transactions to record the subscription and sale of stock for your newly-formed corporation.
To keep controlling interest in the company and not in someone else's hands.There is a second reason as well. If they are sitting on cash and think the stock is under-valued, they will invest in their own company. This does two things. [ [ First it props up the price by increasing the buy side demand. Second, it provides them the opportunity to enjoy a gain in the exchange when they put those
share back into the market at a higher price. It also helps increase the Earning Per Share EPS, when earnings come out they put them into a per share basis. When companies buy shares they are no longer considered outstanding, so the same amount of money is divided among less shares. ] ]
Expert answered|MrG|Points 1953|
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Asked 12/1/2012 1:43:29 PM
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