7. Stock repurchases There are a number of reasons why a firm might want to repurchase its own stock. Read the statement and then answer the corresponding question about the company's motivation for the stock repurchase: Tort and Polk Corp.'s board of directors has decided to repurchase some of its stock on the open market because the company has received a large, one-time cash now, and it believes that the company's stock is undervalued. What is the company's motivation for the stock repurchase? To adjust the firm's capital structure To distribute excess funds to stockholders To acquire shares needed for employee options or compensation To protect against a takeover attempt Which of the following statements would be considered advantages of a stock repurchase? Check all that apply. The Interval between stock repurchases tends to be irregular, which means that investors cannot always count on cash inflows from repurchases The market generally perceives a stock repurchase as a sign that management belleves that the firm's stock is undervalued Stock repurchases are an effective way to change the firm's capital structure when the amount of equity in the current capital structure is significantly greater than the firm's target capital structure