Which of the Following Is a Reason Why Management May

question 45

Multiple Choice

Which of the following is a reason why management may prefer repurchase offers over cash dividends?

• A) Repurchases signal earnings predictability.
• B) Once corporations begin paying dividends, they become a legal obligation but repurchase offers do not.
• C) Repurchase agreements allow management greater flexibility in deciding how much cash to distribute.
• D) All of the above

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Definitions:

High

A state or condition that is above average in quantity, size, or intensity.

Differentiation

The process of distinguishing a product, service, or brand from competitors in ways that make it more appealing to the target market.

New Innovative Unit

A specialized group or department within an organization focused on developing innovative strategies, products, or services.

Market Mechanisms

The various processes and systems through which goods, services, and securities are traded in a market, determining prices through supply and demand.