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

question 3

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 not do well in the future and The investor believes that the company's management is entrenching itself by buying off any large block shareholders.

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Definitions:

Chromosomal DNA

The DNA that is contained within the chromosomes of a cell, carrying genetic information vital for the cell's structure, development, and function.

Nuclei

The central and most important part of an object, movement, or group, forming the basis for its activity and growth; in biology, the membrane-bound organelle that contains the cell's DNA.

Systematic Notes

Organized and methodical recordings of observations, measurements, or information that are carefully maintained for analysis, research, or documentation purposes.

Gregor Mendel

A scientist known as the father of modern genetics for his pioneering work on the inheritance of traits in pea plants, establishing the laws of genetics.