Which Statement Is Correct

question 86

Multiple Choice

Which statement is correct?

• A) Stock repurchases invalidate the dividend discount model
• B) Stock repurchases do not add value to a business and can be ignored.
• C) When there are repurchases, it is simpler to value a business by discounting the free cash flow.
• D) Stock repurchases increase the number of shares and make it difficult to forecast dividends per share

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Definitions:

Diversified

The quality of having a wide variety or range of different things or activities.

SWOT Analysis

A strategic planning tool that evaluates the Strengths, Weaknesses, Opportunities, and Threats involved in a project or business venture.

Strengths

Positive attributes of an organization. These are internal resources and capabilities that support a company to achieve its mission, goals, and competitive advantage.

Weaknesses

Areas where a business or product lacks strength or is less competitive compared to others in the market.