A Share Repurchase Is Said to Be Equivalent to the Payment

question 102

Multiple Choice

A share repurchase is said to be equivalent to the payment of a cash dividend because each strategy:

• A)causes share price to decline.
• B)causes share price to increase.
• C)creates the same tax liability for the investor.
• D)leaves the firm with the same amount of assets.

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Definitions:

Rock Salt

A sedimentary rock composed primarily of sodium chloride, forming from the evaporation of seawater and used in various applications including road de-icing and as a seasoning.

Dried Up Lake Bed

The base of a former lake that has lost its water content and become dry, often leaving behind salt flats, minerals, or arid land.

Clastic Sediments

Sediments made up of fragments, or clasts, of pre-existing minerals and rock that have been transported and deposited by wind, water, or ice.

Amount Of Sorting

The degree to which sediment particles are of uniform size, which influences the texture and porosity of sedimentary rocks.