Share Repurchases Are a Credible Signal That the Shares Are

question 89

Multiple Choice

Share repurchases are a credible signal that the shares are ________,because if they are ________,a share repurchase is costly for current shareholders.

• A) under-priced; over-priced
• B) over-priced; under-priced
• C) under-priced; under-priced
• D) over-priced; over-priced

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Definitions:

Wage Rate

The amount of money paid to an employee per unit of time, often per hour or year.

Labor Supply

The total number of hours that workers are willing and able to work at a given wage rate.

Utility Maximizing

The economic principle that consumers will choose a combination of goods and services that maximize their overall satisfaction.

Indifference Curves

graphical representations in microeconomics illustrating combinations of goods that provide an individual with the same level of satisfaction.