Which of the Following Is Not One of the Advantages

question 11

Multiple Choice

Which of the following is not one of the advantages of share repurchase as a dividend decision?

• A) It effectively converts dividend income into capital gains income.
• B) It provides firm with greater financial flexibility in timing the payment of returns to shareholders.
• C) All current shareholders can sell their shares at a higher price.
• D) It represents a signal to investors that the company expects higher earnings in the future.

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Definitions:

Net Domestic Product

The total value of all goods and services produced within a country's borders adjusted for depreciation.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, reflecting wear, tear, and obsolescence.

GDP Deflator

The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy, acting as a gauge of inflation.

Real Per Capita GDP

The measure of a country's economic output that accounts for its number of people and adjusts for inflation, indicating the average economic well-being of its citizens.