Stock Repurchases Are Made for All of the Following Reasons

question 60

Multiple Choice

Stock repurchases are made for all of the following reasons EXCEPT

• A) to obtain shares to be used in acquisition.
• B) to retire outstanding issues.
• C) to have shares available for stock option plans.
• D) to decrease the book value of equity.

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Definitions:

Laspeyres Index

A price index used to measure the relative change in the price of a fixed basket of goods and services over time, using the quantities of a base period.

Prices

The monetary value assigned to a product or service, determining how much it costs to buy.

Bundle

A combination of various goods and services selected by consumers, used in economics to analyze choices and preferences.

Giffen Good

A product that people consume more of as the price rises, violating the basic law of demand in economics.