Once management announces that it will buy back one million shares over a given time period, as circumstances become appropriate,
A)it is legally obligated to buy all one million shares back.
B)it is not legally obligated to buy all one million shares back.
C)it must buy back the number of shares that are equal to income in a given year (up to one million shares).
D)it must buy back the number of shares that are equal to income minus common stock dividends in a given year (up to one million shares).

Question

Quizplus · Accepted Answer

Many analysts are hesitant to accept the premise that there will be a follow-through. A 1 million share repurchase program might be announced, but only 150,000 shares might actually be repurchased over time. This is legal, since there is no legal obligation to buy back all 1 million shares announced. Many factors may have changed during the interim period, making a buyback undesirable.

Once Management Announces That It Will Buy Back One Million