If You Ignore Taxes and Transaction Costs, a Stock Repurchase

question 332

True/False

If you ignore taxes and transaction costs, a stock repurchase will reduce the PE ratio more than an equivalent stock dividend.

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Definitions:

Functional Analysis

A behavioral technique that identifies the antecedents and consequences of behavior to understand its purpose or function.

Motivation Behind Behavior

The underlying reasons or forces that drive an individual to act or behave in a certain way, which can be intrinsic or extrinsic in nature.

External Variables

Factors outside the individual that can influence behavior or outcomes, including social, economic, and physical environment conditions.

Predictable Ways

Patterns or behaviors that occur in a manner that can be anticipated based on previous observations or known principles.