Question
In: Finance
Which of the following repurchasing method definitions is NOT correct? Select one: a. Selective Buy-Backs: The...
Which of the following repurchasing method definitions is NOT correct? Select one: a. Selective Buy-Backs: The firm makes repurchase offers privately to some shareholders. b. Employee Share Scheme Buy-Back: The company repurchases shares held by employees. c. Repurchase Put Rights: The firm announces that it will repurchase a number of shares at a set price. d. Open Market: The firm buys its stock on the open market from shareholders.
Solutions
Expert Solution
- Selective Buy-Backs: The firm makes repurchase offers privately to some shareholders.
This statement is correct as in Selective Buy-Backs offer the firm makes repurchase offers privately to some shareholders only.
- Employee Share Scheme Buy-Back: The company repurchases shares held by employees.
This statement is correct as Employee Share Scheme Buy-Back option is available for the shares held by employees or for the employees or the directors of the company whoever is getting salary from the company.
- Repurchase Put Rights: The firm announces that it will repurchase a number of shares at a set price.
This statement is not correct as the put rights are the right of the seller of shares to purchase at a certain price, which is set ahead of time. The company can repurchase shares at that price only if it has put right on shares.
d. Open Market: The firm buys its stock on the open market from shareholders.
This statement is also correct as whenever the prices are favorable; the firm can buy its stock on the open market from shareholders
Therefore right option is option c.
jeff jeffy answered 1 year agoRelated Solutions
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