Assignment 14- Distributions to Shareholders: Dividends and Share Repurchases 10. Stock repurchases 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: Smith and Martin Co.'s board of directors has decided to repurchase some of its stock on the open market because it wants to increase the company's debt-to-equity ratio. What is the company's motivation for the stock repurchase? O To adjust the firm's capital structure O To distribute excess funds to stockholders O To acquire shares needed for employee options or compensation O To protect against a takeover attempt Which of the following statements would be considered advantages of a stock repurchase? Check all that apply. At times, the company will repurchase its stock at a price higher than the true value of the stock. D A stock repurchase can be used to minimize the dilution effect associated with employees exercising their stock options. Stock repurchases are current capital structure is significantly greater than the firm's target capita an effective way to change the firm's capital structure when the amount of equity in the l structure. Type here to search