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:

Absolute Advantage

The ability of an entity to produce a good or service more efficiently (using fewer resources or generating higher output) than another entity.

Diplomatic Expertise

The skill and knowledge required to manage international relations and negotiate effectively on behalf of a state.

Differences in Tastes

Variations in consumer preferences that influence demand for products and services across different markets or demographics.

Resource Endowments

The natural resources, labor force, capital, and technology that a country possesses, which influence its economic potential.