Question

Which one of the following statements is TRUE? a. A targeted share repurchase can be used to encourage a hostile takeover. b. A targeted share repurchase is when the company purchases stock from one shareholder at a higher price than it offers to other shareholders. c. A shareholder-friendly charter will make it harder for a company to be acquired. d. An example of asset switching is an option to exchange one piece of real estate for another.

Answer 1

Option b: A targeted share repurchase is when the company purchases stock from one shareholder at a higher price than it offers to other shareholders

Step-by-step explanation:

Stock repurchase is simply the buying of stock by a company from its stockholders. It is another means or way for a company to distribute value to the stockholders. It is a transactions in which a firm buys back shares of its own stock, thereby decreasing shares outstanding and increasing the stock price.

Repurchase by direct negotiation involves purchasing shares from a major shareholder often at a premium over market price.

Repurchase shares: is a way companies uses cash to buy shares of its own outstanding stock, shares are held and usually resold if company needs to raise money in the future.