An advantage of using a stock redemption to acquire shares from the estate of a deceased shareholder is that the other shareholders would not be required to use their own funds for the acquisition.

Question

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When a stock redemption is used to acquire shares from the estate of a deceased shareholder, the corporation buys back the shares using its own funds. This means that the other shareholders are not required to contribute their own money for the acquisition.

An Advantage of Using a Stock Redemption to Acquire Shares