An Alternate Way to Pay Investors Is When the Firm

question 23

Multiple Choice

An alternate way to pay investors is when the firm uses cash to buy shares of its own outstanding stock,also known as:

• A)dividend investment.
• B)retained earnings.
• C)initial public offering.
• D)share repurchases.
• E)seasoned equity offering.

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Definitions:

Loanable Funds

The money available for borrowing in the financial markets, derived from savings and supplied to borrowers at an interest.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry, ensuring market integrity, and protecting investors.

Investor Losses

The decrease in monetary value that investors experience in their investment portfolio due to market movements or poor investment decisions.

Fraud or Misrepresentation

Involves intentionally deceiving or misleading parties for financial gain or to damage them financially.