6. Stock repurchases Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate their holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of Gadgetron Inc.: Gadgetron Inc. expects to earn $5,700,000 this year. The company currently has 830,000 shares outstanding, and the shares have a per-share market price of $19. Assuming that Gadgetron's price-to-earnings (P/E) ratio remains constant and its earnings are unaffected by a share repurchase transaction, then the company's expected market price per share-if it repurchases 70,000 shares at the current market price-should be Which of these factors are considered an advantage of a stock repurchase? Check all that apply. Stockholders who sell their stock back to the company might claim that they were not made fully aware of all implications of the repurchase Repurchases can be used to produce large-scale changes in capital structure. The firm might pay too high a price for the repurchased stock. Grade It Now Save & Continue Continue without saving