Which Statement Below Regarding a Share Repurchase Is True

question 70

Multiple Choice

Which statement below regarding a share repurchase is true?

• A) A share repurchase grows a company's assets and equity.
• B) The company repurchasing shares is not entitled to vote.
• C) Repurchasing shares shrinks a company's assets and equity.
• D) Repurchasing shares increases retained earnings.

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Definitions:

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Equilibrium Price

The pricing point where the volume of a good or service provided equals the volume demanded, achieving market harmony.

Market-Clearing Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand, clearing the market.

Market Price

The current price at which an asset or service can be bought or sold in the open market, determined by supply and demand dynamics.