Stock repurchases are made for all of the following reasons EXCEPT
A) to obtain shares to be used in acquisition.
B) to retire outstanding issues.
C) to have shares available for stock option plans.
D) to decrease the book value of equity.

Question

Quizplus · Accepted Answer

Stock repurchases are typically made to retire outstanding issues, have shares available for stock option plans, or obtain shares to be used in an acquisition. Decreasing the book value of equity is not a common reason for stock repurchases. In fact, most companies seek to increase their book value of equity over time to demonstrate a strong financial position to investors.

Stock Repurchases Are Made for All of the Following Reasons