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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
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: Smith and Martin Co. is a high-tech company that recently repurchased a number of shares so that it will be able to meet obligations to employees without having to issue any new shares. What is the company's motivation for the stock repurchase? To acquire shares needed for employee options or compensation To protect against a takeover attempt To distribute excess funds to stockholders To adjust the firm's capital structure Which of the following statements would be considered advantages of a stock repurchase? Check all that apply. Stock repurchases allow a firm to distribute earnings to investors without changing the amount of the regular cash dividend. A stock repurchase can be used to minimize the dilution effect associated with employees exercising their stock options. At times, the company will repurchase its stock at a price higher than the true value of the stock
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