Which of the Following Is NOT a Possible Result of a Share

question 68

Multiple Choice

Which of the following is NOT a possible result of a share buy-back?

• A) Removing a large number of shares from circulation can change the ability of certain shareholders to control the company.
• B) If the number of remaining shares is relatively small, the remaining shares will be less liquid.
• C) The company will decrease its leverage ratio (debt-to-equity ratio).
• D) By repurchasing shares when they are undervalued, managers can effectively transfer value from selling shareholders to shareholders who don't take part in the buy-back.

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