Venus Co Has Just Announced That the Board Has Reached a a Targeted

question 21

Multiple Choice

Venus Co. has just announced that the board has reached a targeted stock repurchase agreement with a large stockholder. The company will repurchase all of the large investor's stock for 90 percent of the current market value. When the stock repurchase was announced, the shares of Venus Co. fell by 7 percent. Which of these explanations could reasonably explain the drop in share price?

• A) The willingness of the large investor to accept the targeted stock repurchase signals that the large investor believes the company will not do well in the future.
• B) A targeted stock repurchase essentially transfers value from the average investor to the targeted investor.
• C) The investor believes that the company's management is entrenching itself by buying off any large block shareholders.
• D) Both the willingness of the large investor to accept the targeted stock repurchase signals that the large investor believes the company will have poor future performance and the investor believes that the company's management is entrenching itself by buying off any large block shareholders.

---

Definitions:

Emotional Factors

Elements that influence feelings, mood, and emotional state, impacting behavior and mental health.

Risk Factors

Variables or conditions that increase the likelihood of developing a disease or injury.

Heart Disease

A broad term for any condition affecting the heart's structure and function, including coronary artery disease, heart rhythm disorders, and heart failures.

Increased Chance

A higher likelihood or probability of a specific event or outcome occurring.