When a Company Repurchases Its Own Common Stock,it Is Likely

question 61

Multiple Choice

When a company repurchases its own common stock,it is likely that

• A) the stock price will increase because the company views the stock as undervalued.
• B) the stock price will decrease because the company is creating artificial demand for its stock.
• C) the stock price will remain the same as this is simply an internal transaction.
• D) the board of directors will be fired for incompetence.

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Definitions:

Cash Balance

The amount of money in cash or cash equivalents that a company or individual has available at any given time.

Check Register

A record book or digital log used to track checks written, deposits made, and current balance of a checking account.

Bank Statement

A document provided by a bank detailing all transactions in an account over a specific period, including deposits, withdrawals, and balances.

Insufficient Funds

Insufficient funds occur when an account does not have enough money to cover drafts against it, leading to a bounce check or declined transaction.