A stock repurchase may be viewed as
A) a dividend decision when the firm has excess cash.
B) a financing decision when the firm wants to alter its capital structure.
C) an operating leverage decision.
D) both A and B.

Question

Quizplus · Accepted Answer

A stock repurchase can serve both as a way for a company to distribute excess cash to shareholders (like a dividend) and as a way to change the company's capital structure (like a financing decision). Therefore, both options A and B are valid reasons for a stock repurchase.

A Stock Repurchase May Be Viewed as