Which of the Following Is NOT a Motivation for a Firm

question 26

Multiple Choice

Which of the following is NOT a motivation for a firm to undertake a share repurchase?

• A)Offsetting the exercise of executive stock options
• B)Repurchase of shares from dissident shareholders
• C)Pay free cash flows to shareholders without generating an expectation of continued dividends
• D)To indicate that the management feels the stock is overvalued

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Definitions:

Focus Group

A targeted group of people brought together to discuss and provide feedback on a particular subject or product.

Bill

A written proposal or draft of a law presented to a legislature for discussion and potential approval.

Appeal to Ignorance

A logical fallacy that argues something is true because it has not been proven to be false, or vice versa.

Proposition

A claim or proclamation that embodies an assessment or viewpoint, potentially valid or invalid.