Final answer:
A targeted repurchase occurs when a firm repurchases shares from specific individual stockholders.
Step-by-step explanation:
A selective repurchase occurs when a firm repurchases shares from specific individual stockholders. This is in contrast to open market repurchases where a company buys back its shares from the open market. A selective repurchase could take place for several reasons, such as removing a troublesome shareholder or consolidating ownership.
Companies are required to provide financial capital when they sell stock to the public for the first time during an IPO. Afterwards, when shares are traded between investors, the company does not receive any funds. Shareholders gain a return on their investment either through dividends or through capital gains which occur when the stock's sell price exceeds its purchase price.