Corporation ABC has excess cash and would like to signal to the public that management...

A stock buyback, also called a share repurchase, is the most appropriate corporate action when a company has excess cash and wants to signal that management believes its shares are undervalued. By repurchasing its own shares in the market, the company demonstrates confidence in its valuation and future prospects. A buyback can also reduce the number of shares outstanding, potentially improving per-share financial metrics such as earnings per share. Choice C is correct. A stock split increases the number of shares outstanding and lowers the price per share proportionately, but it does not use excess cash or directly signal that the stock is undervalued. A rights offering raises new capital from existing shareholders, which is the opposite of using excess cash. An exchange offer involves offering one security or asset in exchange for another and is not the standard corporate action for signaling undervaluation through excess cash deployment. The SIE outline includes corporate actions such as splits, reverse splits, buybacks, tender offers, exchange offers, rights offerings, and mergers and acquisitions. This question tests the purpose and market message of a buyback. Reference: Understanding Trading, Customer Accounts and Prohibited Activities; Corporate Actions.