If You Ignore Taxes and Transaction Costs, a Share Repurchase

question 10

Multiple Choice

If you ignore taxes and transaction costs, a share repurchase will: I.reduce the total assets of a firm.
II) increase the earnings per share.
III) reduce the PE ratio more than an equivalent stock dividend.
IV) reduce the total equity of a firm.

• A)I and III only.
• B)II and IV only.
• C)I, II, and IV only.
• D)I, III, and IV only.
• E)I, II, III, and IV.

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Definitions:

Stable/Unstable

Refers to the degree of consistency or variability in a system's state or performance over time.

Global/Specific

Pertains to general or worldwide aspects when used in the context of 'global,' whereas 'specific' refers to particular, detailed instances or examples.

Internal/External

Terms related to the sources of influence or causes; internal refers to factors within a person, while external refers to factors outside of an individual.

Women's Biological

A term potentially incomplete but could refer to the biological aspects distinct to women, including reproductive functions and hormonal makeup.