A Share Repurchase Is Said to Be Equivalent to the Payment

question 50

Multiple Choice

A share repurchase is said to be equivalent to the payment of a cash dividend because each strategy:

• A) causes share price to decline.
• B) causes share price to remain constant.
• C) creates the same tax liability for the investor.
• D)leaves the firm with the same amount of assets.

---

Definitions:

Collusive Outcome

A situation where firms in a market or industry agree, often secretly, to set prices or output levels to the detriment of market competition.

Repeated Strategy

A course of action consistently employed in sequential or repeated decision-making contexts, often in game theory.

Prisoners' Dilemma

A scenario in game theory where two individuals acting in their own self-interest do not produce the optimal outcome, illustrating the potential conflict between personal and social interests.

Dominant Strategy

A strategy that is the best for a player in a game regardless of the strategies chosen by the other players.