Answer: Is essentially the same as a cash dividend program provided there are no taxes or other costs.
Explanation:
Here is the correct question:
stock repurchase program:
a. Requires all shareholders to sell a fraction of their shares
b. Is preferred over a high dividend program only by tax-exempt shareholders.
c. Decreases both the number of shares outstanding and the market price per share.
d. Has no effect on a firm's financial statements
e. Is essentially the same as a cash dividend program provided there are no taxes or other costs.
A stock repurchase program simply means when a company buys back or gets back its own shares. This is a more flexible method used in returning money to the company's shareholders. This makes it typically the same as a cash dividend program when no taxes or other costs are added.
A company might buyback the share in order to improve its financial ratios or to invest in itself.
