A Stock Repurchase Program

question 90

Multiple Choice

A stock repurchase program:

• A)requires all shareholders to sell a fraction of their shares.
• B)is preferred over a high-dividend program only by tax-exempt shareholders.
• C)decreases both the number of shares outstanding and the market price per share.
• D)has no effect on a firm's financial statements.
• E)is essentially the same as a cash dividend program provided there are no taxes or other costs.

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Definitions:

Private Saving

The portion of an individual's or entity's income that is not spent on consumption or paid in taxes and is instead saved.

National Saving

The total amount saved within a country in a given time period, typically considered as the sum of private and public savings.

Investment

The practice of apportioning financial resources aimed at generating earnings or profits.

Private Saving

The portion of households' income that is not spent on consumption or taxes, often put aside for future use or investment.