In Which of the Following Situations Might a Stock Repurchase

question 18

Multiple Choice

In which of the following situations might a stock repurchase result in decreased firm value?

• A)when a firm without any positive NPV projects executes a repurchase to distribute excess cash flow to the shareholders
• B)when a firm executes a targeted repurchase in order to buy back shares from specific shareholders at above-market prices
• C)when a firm does an open market, rather than an auction-based, repurchase
• D)Stock repurchases never increase or decrease the value of the firm.

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Definitions:

Norms Of Behavior

Social rules that govern the actions of members within a society.

Traffic Fix

Informal; refers to the unethical or illegal manipulation of traffic violations to avoid penalties.

Police Corruption

Unethical or illegal conduct by law enforcement officers, including bribery, misuse of authority, or involvement in criminal activities.

Misdemeanor Fix

A term that does not have a widely recognized meaning within legal or general discourse. NO.