Question 4 Constructive retirement is when A P buys Ss commo

Question 4 Constructive retirement is when A. P buys S\'s common stock O B. P buys S\'s bonds payable O C. P retires bonds payable. O D. P retires shares of its own stock.

Solution

If a company buys back its own share, which is treasury stock,and if the management of the company decides to retire them permanently, its called constructive retirement.

So when P retires shares of its own stock, it results in constructive retirement .

Option D is correct.