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Problem:

If you ignore taxes and transaction costs, a stock repurchase will?

I. reduce the total assets of a firm.

II. increase the earnings per share.

III. reduce the PE ratio more than an equivalent stock dividend.

IV. reduce the total equity of a firm.

A. I and III only

B. II and IV only

C. I, II, and IV only

D. I, III, and IV only

E. I, II, III, and IV

Summary of question:

The question belongs to Finance and it discusses about stock repurchase that can occur under certain circumstances, if we ignore taxes and transaction costs.

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