Which of the Following Circumstances Is Likely to Motivate a Firm

question 69

Multiple Choice

Which of the following circumstances is likely to motivate a firm to repurchase some of its share?

• A)Management believes that the share's market price is below its intrinsic value.
• B)The firm has excess cash.
• C)Institutional investors prefer share repurchases to cash dividends.
• D)All of the above.

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Definitions:

Real Gross Domestic Product

The measure of the value of economic output adjusted for price changes (inflation or deflation).

Money Supply

The total budget of financial assets, including coins, cash, and contents of checking and savings accounts, ready for use within an economy at a concrete time.

Price Level

Price Level refers to the average of all current prices for goods and services in an economy, influencing purchasing power and economic decisions.

Real GDP

Real GDP, or Gross Domestic Product adjusted for inflation, measures the value of all goods and services produced by an economy in a given period, reflecting the true growth in economic output.