Reasons Given for a Company to Buy Back Its Own

question 32

Multiple Choice

Reasons given for a company to buy back its own shares include all of the following except:

• A)to reduce the market price per share of its stock to make it more affordable to potential investors.
• B)to permanently reduce shareholder claims.
• C)to temporarily hold shares for later use.
• D)to decrease the likelihood that a company will be the object of a takeover bid.
• E)to distribute in an employee stock purchase plan.

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Definitions:

Shear Zone

A region of the Earth's crust where rocks have been significantly deformed due to shear stress.

Folded Metamorphic Rocks

Metamorphic rocks that have been subjected to significant pressure and heat, resulting in a folded appearance due to deformation.

Well-developed Cleavage

A property of minerals that allows them to break along flat, parallel surfaces with ease, often a result of their crystal structure.

Bedding

Layers of sediment or sedimentary rock laid down in natural processes within bodies of water or on the Earth's surface.