Examlex

Solved

What Is a Stock Redemption? What Are Some of the Reasons

question 35

Essay

What is a stock redemption? What are some of the reasons for making a stock redemption? Why are some redemptions treated as sales and others as dividends?


Definitions:

Equity Mutual Funds

Mutual funds that primarily invest in stocks, aiming for growth by capital appreciation.

Indexed

A strategy or financial instrument that is designed to track a specified basket of stocks or index, aiming to mirror its performance.

Cumulative Abnormal Returns

The aggregate difference in an asset’s observed versus expected returns over a specific timeframe, often used to assess impact of an event.

Takeover Announcement

A public declaration that a company intends to acquire another company, often triggering changes in the stock prices of both companies involved.

Related Questions