Stock repurchases may be made for all of the following reasons EXCEPT
A) to enhance shareholder value by reducing the number of shares outstanding and thereby raising earnings per share.
B) to help discourage an unfriendly takeover by reducing the number of publicly traded shares.
C) to make shares available for stock option plans.
D) to make shares available for stock dividends.

Question

Quizplus · Accepted Answer

Stock repurchases are not made to make shares available for stock dividends. Rather, companies usually pay stock dividends by distributing additional shares to shareholders based on their current holdings. The other options listed are valid reasons for stock repurchases.

Stock Repurchases May Be Made for All of the Following