FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Companies buy their own shares of stock for employee stock option plans, to support the stock price, to increase earnings per share, and to make a hostile takeover more difficult.
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- When it comes to Financial Business Management, discuss whether the statements below are true or false? On average, acquisitions destroy shareholder value. The liquidation value of a company’s shares always places a floor under its stock price. An unusually low stock price in managements’ eyes encourages management to take the company private in a management buyout.arrow_forwardWhich of the following statements is true? Group of answer choices a. Dividend payments are attractive to executives who hold many executive stock options that were awarded to them by their firms b.Executives and other insiders benefit most by being able to tender their shares in an open market repurchase since they usually are privy to information that is not available to the general public c.Empirical research suggests that small, retail investors prefer stock repurchases to dividend payments d. a firm does not pay dividends, some institutional investors are prohibited from investing it the firmʹs equityarrow_forwardIt is generally argued that the takeover constraint : Deters management from engaging in opportunistic behavior. Deters management from considering acquiring other companies. Deters management from declaring dividends. Deters management from increasing a firm’s level of borrowing.arrow_forward
- TRUE OR FALSE Companies typically reacquire shares with the hopes of selling them at a higher price to increase profits for the period.arrow_forwardWhich of the following is a reason why an investor would place a stop buy order on a stock? To ensure a short position is closed out for profit To ensure that the broker executes immediately at the current market price To ensure the stock is sold before its price falls to a specified level To ensure the stock is purchased when its price is risingarrow_forwardThe market for corporate control refers to: Question 26 options: how much you have to pay to be appointed CEO. the market price of all a company's outstanding bonds. the market price of all a company's outstanding convertible bonds. the market for blocks of stock large enough to affect or replace management, or to wholly acquire a company.arrow_forward
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