Evaluating Share Repurchase Methods

XYZ Corp, a publicly-traded company, has decided to initiate a share repurchase program to return value to its shareholders after generating significant cash flows for the past year. The management is evaluating different methods of repurchasing shares and is keen on understanding the implications of each method in terms of impact on the stock price, tax treatment for shareholders, and overall corporate financial strategy.

The three potential methods under consideration are: 1) Open Market Purchases, 2) Dutch Auction, and 3) Fixed Price Tender Offer. Based on the unique characteristics of each method, identify which method is most likely to result in a lower average cost per share repurchased while allowing the company to maintain greater control over the volume of shares purchased.