Which of the Following Is Not True Regarding a Company's

question 158

Multiple Choice

Which of the following is not true regarding a company's repurchase of its own stock?

• A)All other things equal, the repurchase of stock should increase its market price.
• B)Companies will only consider repurchasing their stock if they think it is undervalued.
• C)Companies can repurchase their stock on the open market.
• D)Companies can make a tender offer to current stockholders, normally at a premium.
• E)If too many stockholders accept a tender offer, the company can buy a pro rata share of those each stockholder offered.