One of the Disadvantages of Stock Repurchases Is That

question 26

Multiple Choice

One of the disadvantages of stock repurchases is that:

• A) the company will spend its excess cash.
• B) the company will not be able to change its capital structure.
• C) the company will become vulnerable to takeovers.
• D) the company will pay too much for stock that is repurchased.
• E) the company will make it difficult for employee options to be exercised.

---

Definitions:

Projective Testing

Projective testing is a psychological assessment technique where individuals respond to ambiguous stimuli, revealing hidden emotions, desires, and conflicts.

Social Cognition

The process of attending to, interpreting, and remembering information about ourselves and others.

Unconscious Thoughts

Mental processes that occur without conscious awareness, influencing behaviors and perceptions.

Projective Test

An evaluative psychological instrument employing unclear stimuli to prompt reactions that uncover facets of a person's character.