All of the Following Are Reasons a Company Might Repurchase

question 78

Multiple Choice

All of the following are reasons a company might repurchase its own shares except:

• A)to distribute excess cash to the shareholders.
• B)as the first step in establishing a dividend policy.
• C)to increase the earnings per share.
• D)as a signal that management thinks the shares are undervalued on the market.

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Definitions:

Bundle

In economics, a combination or collection of goods and services considered as a single entity for the purpose of analysis or transaction.

Constants

In mathematics and science, fixed values that remain the same throughout an equation or experiment.

Indifference Curve

A graph representing combinations of goods between which a consumer is indifferent, showing preference levels and trade-offs.

Midterm Grade

The grade assigned to a student's performance in a course midway through the term, often used as an indicator of the student's understanding of the material so far.