Question
Which of the following statements are reasons for a company to do a share repurchase? Choose all that apply, by writing in the letters of
Which of the following statements are reasons for a company to do a share repurchase? Choose all that apply, by writing in the letters of only those that are reasonable justifications for a share repurchase.
A. To pay out excess cash to shareholders because the firm does not need it to take on positive-NPV projects.
B. To buy the shares at a good price, because the managers believe that the shares are currently undervalued.
C. To artificially push up the stock price by reducing the number of remaining shares.
[Note: write in the letter for all that apply. This will not be automatically graded, but you will be able to check it yourself, later, by comparing your answer to the sample answer.]
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