CFA Practice Question

There are 90 practice questions for this study session.

CFA Practice Question

A company is buying back its stocks to offset the dilution of earnings from its stock option program. Which of the following statements best describes the effect on the financial statements of the amount spent to buy back the stocks? The amount spent reduces ______.
A. cash from operating activities
B. cash from financing activities
C. net income
Explanation: The amount spent to buy back stocks to offset dilution is classified as a financing activity on the cash flow statement; therefore, cash from financing decreases.

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