When a Company Repurchases Its Shares but Does NOT Retire

question 47

Multiple Choice

When a company repurchases its shares but does NOT retire them, these shares would said to be

• A) authorized, issued and outstanding.
• B) authorized and issued, but not outstanding.
• C) redeemable.
• D) authorized and unissued but not outstanding.

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Definitions:

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%.

Yield To Maturity

The total return anticipated on a bond if held until its maturity date, factoring in its current market price, face value, interest rate, and time to maturity.

Perpetuity

A type of financial instrument that offers indefinite or endless payments to the holder, often used to represent the value of fixed interest stocks.

Compound Rate

The rate at which a sum of money grows exponentially over time, considering the reinvestment of interest or earnings.