Question

1) Which of the following considerations should NOT be related to management's concerns when setting a stock repurchase policy?

A) Does a firm have enough financial reserves to meet the short-term obligations in periods when earnings are down or investment requirements are up?

B) Over the long term, how much does a company's level of earnings exceed its investment requirements? How certain is this level?

C) Can a firm quickly raise equity capital if necessary?

Answer 1

Given data, from the above question. The considertions should not be related to managements concerns when setting a Stock repurchase policy. That correct answer is option (A) Because the I explanation is given by. → The stock reprochases is a long term decision and tlence shoot term financial reserves would not be considered in this decision - The speed with which equality capital can be raised is important. since it helps to delay the repurchase option. Option a relates to dividend policy and not to stock rsepuschase policy. This is the answer.