Which of the following motivates corporations to enter into share repurchase programs?
A)Favorable impact on EPS
B)Expected favorable impact on share price
C)To modify the firm's capital structure
D)All of the above

Question

Quizplus · Accepted Answer

All of the given options are motivators for corporations to enter into share repurchase programs. Share repurchases can increase earnings per share (EPS) by reducing the number of outstanding shares, which can potentially make the company's financial results look more favorable to investors. Additionally, repurchases can signal to the market that the company believes its shares are undervalued, which can lead to an expected favorable impact on share price. Finally, share repurchases can be a way for a company to modify its capital structure by returning funds to shareholders without having to pay dividends.

Which of the Following Motivates Corporations to Enter into Share