Use the Following Two Statements to Answer This Question

question 16

Multiple Choice

Use the following two statements to answer this question:
I.Managers only repurchase shares to take advantage of their underpricing
II.Share repurchases are exactly the same as cash dividends in the real world.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is incorrect and II is correct.
• D)I is correct and II is incorrect.

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Definitions:

Unilateral Contract

A promise exchanged for an act.

Nominal Consideration

A token amount in a contract to indicate that a deal has been agreed upon, even if the sum is not reflective of the contract's true value.

Love And Affection

Love and Affection, in legal terms, sometimes appears as a form of consideration in personal contracts, though it is not typically recognized as a valid form of consideration in commercial contracts.

Past Consideration

A benefit or value provided or promised in the past, which cannot be considered valid consideration for a current contract under common law.