Stock Repurchases Are Most Commonly Interpreted by Investors as a Signal

question 44

Multiple Choice

Stock repurchases are most commonly interpreted by investors as a signal that:

• A) future repurchases will be forthcoming.
• B) the firm's shares are underpriced.
• C) the firm has an increasing number of positive-NPV opportunities.
• D)stock repurchases will gradually replace the stock dividends.

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Definitions:

Evolutionary Scenario

A theoretical framework used to describe and analyze the evolutionary processes that give rise to specific traits or behaviors.

Behavioral Trait

A characteristic way of behaving that is often significant to the survival or reproductive success of an organism.

Proximate Explanations

Explanations in biology that address the immediate cause or mechanism of a behavior or trait, as opposed to its evolutionary or historical origin.

Ultimate Explanations

Explanations interested in understanding the evolutionary reasons or adaptive significance behind behaviors or traits.