We observe negative stock price reactions to Greenmail deals.Why does this happen?

A. Because these deals indicate that the company may issue equity in the future, thus diluting the value of existing shares

B. Because these deals generate an adverse selection problem, as the company pays to buy back shares whose value is unknown

C. Because both the inflated price paid by the company to buy back its shares and the reduced likehood of a takeover hurt the shareholders

D. Because it is pointless for the company to buy its own shares