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Suppose a Firm Does Not Pay a Dividend but Repurchases

Question 41

Multiple Choice

Suppose a firm does not pay a dividend but repurchases stock using $20 million of cash.The market value of the firm decreases by:

A) $20 million.
B) -$20 million.
C) 0.
D) $40 million.
E) -$40 million.

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