7. Stock repurchases Aa Aa E There are a number of reasons why a firm might want to repurchase its own stock. Read the statement and then answer the corresponding question about the company's motivation for the stock repurchase: Taft and Polk Corp. 's management is worried that a private equity firm is interested in purchasing the company. The management has decided the company should repurchase its shares on the open market in an attempt to increase the value of the firm's stock. What is the company's motivation for the stock repurchase? O To distribute excess funds to stockholders To acquire shares needed for employee options or compensation To protect against a takeover attempt To adjust the firm's capital structure O Which of the following statements would be considered advantages of a stock repurchase? Check all that apply. The market generally perceives a stock repurchase as a sign that management believes that the firm's stock is undervalued. At times, the company will repurchase its stock at a price higher than the true value of the stock. Stock repurchases allow a firm to reduce the number of outstanding shares, increase the firm's share price, and make a potential takeover of the company more expensive