Generally, investors view the announcement of open-market repurchase of stocks as:
A) bad news and the stock price drops
B) good news and the stock price increases
C) a non-event and does not affect the stock prices
D) very good news and the stock price jumps up

Question

Quizplus · Accepted Answer

Investors generally view open-market repurchase of stocks as good news because it signals that the company believes that its stock is undervalued and is willing to invest in itself by buying back shares. This can lead to an increase in demand for the stock and therefore an increase in stock price.

Generally, Investors View the Announcement of Open-Market Repurchase of Stocks