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.

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Definitions:

Safer Cars

Vehicles that are engineered and designed with advanced safety features to minimize the risks and consequences of accidents.

Accident Forgiveness

An auto insurance feature that protects the insured from a rate increase following the first at-fault accident they cause.

Risky Driving

Driving behavior that increases the likelihood of an accident or harm, such as speeding, driving under the influence of alcohol or drugs, or not obeying traffic signals.

Safe Drivers

Individuals who exhibit behaviors and practices that significantly reduce the likelihood of being involved in accidents or receiving traffic citations.