Management may repurchase shares of its own stock in the market
A) to buy stock that management felt is considerably underpriced.
B) for employee stock options.
C) to use in a merger.
D) all of these options are true.

Question

Quizplus · Accepted Answer

Management may repurchase shares of its own stock for multiple reasons. One reason may be to buy stock that management feels is considerably underpriced, which benefits shareholders as the value of their shares increases. Additionally, shares may be repurchased for employee stock options, which can be used as an incentive for employees to work hard and increase company value. Finally, shares may be repurchased to use in a merger, which can benefit both companies involved. Therefore, option D is the best choice as it includes all the possible reasons for management to repurchase shares of its own stock.

Management May Repurchase Shares of Its Own Stock in the Market