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:

Keynesian View

An economic theory proposing that government intervention, through monetary and fiscal policy, can mitigate the adverse effects of recessions and depressions.

Balanced Budget

A financial statement demonstrating that revenues and expenditures are equal, leading to no deficit for the period.

Fiscal Policy

Government strategies for adjusting its spending levels and tax rates to influence a nation's economy.

Budget Deficits

A financial situation where a government's expenditures surpass its revenues within a specific period.