Which of the Following Is a Reason for a Firm

question 4

Multiple Choice

Which of the following is a reason for a firm for repurchasing its shares?

• A) to diminish the shareholder value by increasing the number of shares outstanding and thereby raising earnings per share
• B) to help encourage a friendly takeover by increasing the number of publicly traded shares
• C) to make shares available for stock option plans
• D) to make shares available for cash dividends

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Definitions:

Wages and Salaries

Compensation received by employees for their labor, including hourly pay, salaries, bonuses, and commissions.

Profits and Losses

Financial gains when revenues exceed expenses or financial losses when expenses surpass revenues, respectively.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Future Value

The value of a current asset at a future date based on an assumed rate of growth over time.