A Company May Choose to Repurchase Stock Rather Than Pay

question 76

Multiple Choice

A company may choose to repurchase stock rather than pay out dividends when:

• A)The company wants to distribute excess cash to its investors
• B)The company wants to give its investors a bumper dividend
• C)The company does not want to make a commitment to distribute more cash
• D)The company does not want to embark on unprofitable ventures

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Definitions:

Mean

The average value of a set of numbers, calculated by dividing the sum of the numbers by the count of numbers.

Risk Management

The process of identifying, assessing, and prioritizing risks followed by the application of resources to minimize, control, or eliminate them.

Potential Project Risks

Identified factors that may negatively affect the success or progression of a project.

Risk Mitigation

The process of identifying, analyzing, and taking steps to reduce or eliminate the risks associated with an activity or project.