Question

Generally, investors view a company’s announcement of a stock repurchase as Select one: a. positive or...

Generally, investors view a company’s announcement of a stock repurchase as

Select one:

a. positive or negative depending on the number of shares being repurchased.

b. bad news, and the stock price drops.

c. good news, and the stock price increases.

d. an unimportant event that does not affect the stock price.

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Answer #1

Answer :- (C) - Good News, and the stock price increases

( Explanation- Generally, investors consider the news of stock repurchase or buy-back as exicting as it boosts the Earning per share of a stock ( because the number of outstanding shares of the company decreases as a result of buy-back) and hence increases its stock price. It is also viewed as a measure of rewarding the shareholders of the company as the price of repurchase is generally higher than the current price of the stock which is again good for the investors and they generally consider it as a good news.)

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