A firm may repurchase its own stock in the market because
A) it will increase the stockholders' wealth.
B) the firm's stock is temporarily depressed.
C) it provides positive informational content.
D) all of these options are correct.

Question

Quizplus · Accepted Answer

All of these options are valid reasons for a firm to repurchase its own stock. Repurchasing stock can increase the value of the remaining shares, signal positive information to investors, and may be done when stock prices are temporarily low.

A Firm May Repurchase Its Own Stock in the Market