Which of the Following Is Not True Regarding a Company's

question 158

Multiple Choice

Which of the following is not true regarding a company's repurchase of its own stock?

• A)All other things equal, the repurchase of stock should increase its market price.
• B)Companies will only consider repurchasing their stock if they think it is undervalued.
• C)Companies can repurchase their stock on the open market.
• D)Companies can make a tender offer to current stockholders, normally at a premium.
• E)If too many stockholders accept a tender offer, the company can buy a pro rata share of those each stockholder offered.

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Definitions:

Central Route

Part of the Elaboration Likelihood Model of persuasion, it involves thoughtful consideration of the arguments presented.

Postdecisional Dissonance

The psychological discomfort experienced after making a difficult decision, often leading to regret or rationalization of the choice made.

Social Psychology

The scientific study of how people's thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Episodic Memory

A form of long-term memory that is concerned with the recall of particular occurrences, settings, and personal experiences.