Which of the Following Is the Best Definition of a Repurchase

question 267

Multiple Choice

Which of the following is the best definition of a repurchase?

• A) Payment made by a firm to its owners in the form of stock, diluting the value of each share outstanding.
• B) Procedure where a firm's number of shares outstanding is reduced.
• C) Policy where a firm pays dividends only after meeting its investment needs while maintaining a desired debt-to-equity ratio.
• D) Another method used to pay out a firm's earnings to its owners, which provides more preferable tax treatment than dividends.
• E) Cash payment made by a firm to its owners in the normal course of business, usually made four times a year.

---

Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced. It includes both fixed and variable costs.

Marginal Product

Marginal Product is the additional output that results from using one more unit of a particular input, holding other inputs constant.

Average Product

The output per unit of input, typically calculated by dividing total output by the quantity of a specific input used.

Average Total Cost

The total cost divided by the number of units produced, representing the cost per unit of output.