Companies may engage in repurchasing its stock instead of paying a cash dividend because:

I. Management believes their stock is undervalued.

II. There are few good investments in non-financial assets.

III. Shareholders will pay less in taxes and retain more after-tax cash flow

Multiple Choice

• I only

• II and III only

• I and III only

• III only

• None of the reasons are correct

• I and II only

• I, II, and III