Generally, investors view the announcement of an open-market repurchase program as
A)bad news, and the stock price drops.
B)good news, and the stock price increases.
C)a nonevent that does not affect the stock price.
D)very bad news, and the stock price plunges.

Question

Quizplus · Accepted Answer

Investors generally view an announcement of an open-market repurchase program as good news because it signals that the company believes its stock is undervalued and is using its excess cash to buy back its own shares, which can increase the value of the stock for remaining shareholders. As a result, the stock price increases.

Generally, Investors View the Announcement of an Open-Market Repurchase Program