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Basic Question 11 of 12
Which of the following would not be considered a disadvantage of a stock repurchase? A. They may not have the same positive effect on stock prices that a cash dividend would have.
B. They may invite lawsuits from stockholders who had insufficient information about future prospects before selling.
C. The firm may pay too high a price for the repurchased stock.
D. They signal managements perception that the company's stock is currently undervalued.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe regular cash dividends, extra dividends, stock dividends, stock splits, reverse stock splits, and share repurchases
describe dividend payment chronology
CFA® 2024 Level I Curriculum, Volume 3, Module 8.