Final answer:
The purchase of treasury stock for more than its par value results in a decrease in total shareholders' equity because the company uses its capital to buy back its own stock and this amount is deducted from equity.
Step-by-step explanation:
When treasury stock is purchased for an amount greater than its par value, the effect on total shareholders' equity is a decrease (Option A). Treasury stock is recorded at cost, which is deducted from the shareholders' equity. If the company pays more than the par value to reacquire shares, this reduces the total equity in the company because it is essentially spending its own capital to buy back its stock. This is contrasted with issuing stock, which increases equity.