Stock repurchase is more desirable than cash dividend

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True or false

1. In general, from the perspective of shareholders in a high tax bracket, a stock repurchase is more desirable than a cash dividend.

2. A technology company announces a major expansion which causes the price of its stock to increase and also causes an increase in the volatility of the stock price. The reactions will have offsetting effects on call option prices.

3. If the management of the firm is suspected of serious agency problems, the board of directors should urge it to pay a relatively small amount of dividends.

4. The exercise of warrants creates new shares which increases share value because cash is paid into the firm at the time of warrant exercise.

Reference no: EM132048641

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