When a Public Firm Declares a Stock Repurchase

question 25

Multiple Choice

When a public firm declares a stock repurchase:

• A) the number of outstanding shares falls along with the price.
• B) the number of outstanding shares falls and the price may rise or remain unchanged.
• C) an investor will receive cash in exchange for a smaller percentage of ownership.
• D) demand drives the stock price up.

Distinguish between various initial solution methods (northwest corner rule, intuitive method) and their implications on transportation cost.

Understand the criteria for a feasible solution in transportation models.

Familiarize with handling degeneracy in transportation models.

Assess the efficacy of different initial solution strategies in terms of cost and feasibility.

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Definitions:

Net Working Capital Turnover

A measure of how effectively a company is using its net working capital to generate sales.

Total Fixed Assets

The cumulative value of all long-term tangible assets that a company owns and uses in its operations, and are not intended for resale within the business year.

Long-term Liabilities

Debts or obligations that are due in more than one year's time, reflecting a company's financing strategies beyond the short term.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating its short-term financial health and operational efficiency.