Enhancement of Shareholder Value Through Stock Repurchase Is Achieved by

question 56

Multiple Choice

Enhancement of shareholder value through stock repurchase is achieved by

• A) sending a positive signal to investors in the marketplace that management believes that the stock is undervalued.
• B) reducing the number of shares outstanding and thereby raising earnings per share.
• C) providing a temporary floor for the stock price, which may have been declining.
• D) all of the above.

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Definitions:

Long Futures Position

Holding a futures contract that obligates the buyer to purchase the underlying asset at a specified price on a specified future date, typically anticipating a price rise.

Levered Investment

Levered Investment involves using borrowed funds in addition to one's own investment capital to enhance the potential return of an investment.

Long Stock Position

The ownership of shares in a company with the expectation that they will increase in value over time.

Russell 2000

An index measuring the performance of approximately 2000 small-cap companies in the United States.