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

question 47

Multiple Choice

Which of the following is NOT a possible result of a stock repurchase?

• A) Removing a large number of shares from circulation can change the ability of certain shareholders to control the firm.
• 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 stock when it is undervalued, managers can effectively transfer value from selling stockholders to stockholders who don't take part in the repurchase.

Apply decision rules for further processing decisions.

Understand how to calculate and interpret the change in net income resulting from discontinuing a product.

Calculate the opportunity cost of accepting a special order or utilizing capacity for different products.

Evaluate the financial implications of discontinuing a department or product line.

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Definitions:

Bundling

Practice of selling two or more products as a package.

Price Discrimination

The strategy of selling the same product at different prices to different segments of consumers, based on their willingness to pay.

Combination Meal

A set meal at a restaurant that includes multiple items at a fixed total price, often providing a discount compared to purchasing items separately.

Student ID

A unique identifier assigned to students by educational institutions for tracking and administrative purposes.