Which Statement Is Correct Respecting a Company's Repurchase of Its

question 38

Multiple Choice

Which statement is correct respecting a company's repurchase of its own shares?

• A)It provides a tax disadvantage to the shareholder.
• B)It enables the company to acquire stock for distribution as compensation to employees.
• C)It provides a negative signal to the market.
• D)It causes earnings per share to decrease.

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Definitions:

Statistic

A numerical measure that describes some characteristic of a sample, such as its mean or variance, used for making inferences about a population.

Interquartile Range

A measure of statistical variability, representing the difference between the 75th (upper quartile) and 25th (lower quartile) percentiles.

Variance

A gauge for the extent of dispersion in a collection of data, derived by the average of squared differences relative to the mean.

Sample Mean

The average of all the data points in a sample set from a population.