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    Question

    Which of the following would not be a good reason for a

    company to repurchase shares of its own stock ?
    A Believes its stock is overvalued Correct Answer Incorrect Answer
    B Believes a stable cash dividend is in the best interest of shareholders Correct Answer Incorrect Answer
    C Wants to increase the amount of leverage in its capital structure Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Management would repurchase shares of its own stock if it believed that shares were undervalued, not overvalued.

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