Characteristics of Open Market Share Repurchases

Easy Dividends And Repurchases Share Repurchase Methods

XYZ Corporation is considering different methods to execute a share repurchase program. The management is keen on maintaining shareholder confidence while optimizing the financial benefits of the repurchase. One of the methods they are contemplating is an open market repurchase, where the company buys back its shares from the stock market at prevailing market prices.

Which of the following statements correctly characterizes this share repurchase method?

It allows the company to selectively buy back shares at predetermined prices.

It typically has the most flexibility in timing and amount of shares purchased.

It guarantees that all shareholders will have the opportunity to sell their shares back to the company.

Hint

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