Management May Repurchase Shares of Its Own Stock in the Market

question 86

Multiple Choice

Management may repurchase shares of its own stock in the market

• A) to buy stock that management felt is considerably underpriced.
• B) for employee stock options.
• C) to use in a merger.
• D) all of these options are true.

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Definitions:

American Put Option

A type of options contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price before or at a specified expiration date.

Market Interest Rates

The prevailing rate of interest available in the marketplace on investments and borrowing.