Which of the Following Is Not a Motivation for a Share

question 36

Multiple Choice

Which of the following is not a motivation for a share repurchase?

• A) Offsetting the exercise of executive stock options
• B) Repurchase of shares from dissident shareholders
• C) Pay free cash flows to shareholders without generating an expectation of continued dividends
• D) To indicate that the management feels the stock is overvalued

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Supply Curve

A visual chart that illustrates the connection between a product's price and the amount of the product that suppliers are prepared to offer.

External Benefits

Positive effects experienced by third parties or the society at large due to an economic transaction they were not directly involved in.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product.