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Compared to raising regular cash dividends, initiating an open-market stock repurchase is generally not as strong a positive signal to the investors because the repurchase can easily be canceled or scaled back before it is completed.

A) True
B) False

Correct Answer

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Traditionally, capital gains taxes on repurchases have been higher than the taxes on dividends.

A) True
B) False

Correct Answer

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Stockholders who don't choose to sell back their shares in a stock repurchase are losing money because the company is only distributing value to the participating shareholders.

A) True
B) False

Correct Answer

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