Question
All but one of the following statements are true concerning the benefits of share buybacks. Identify the statement which is not correct. a. Buybacks offer
All but one of the following statements are true concerning the benefits of share buybacks. Identify the statement which is not correct. a. Buybacks offer firms an essential source of extra capital, particularly if significant acquisitions are under consideration. b. Buybacks can offset the earning dilution effect caused when employee options result in issuing additional new shares. c. Buybacks are an alternative to increasing dividends without changing dividend expectations of shareholders. d. As fewer shares are remaining to share the same earnings, a buyback should increase the firm's earnings per share. e. Buybacks make sense when the management feel their shares are under-priced.
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