Why has the popularity of stock repurchases been growing faster than the cash dividends as a method for companies to distribute cash to their stockholders
What will be an ideal response?
Answer: Stock repurchases allow investors to tailor the timing of cash flows to their individual needs and tax situations. An investor with high current income can refuse the distribution, thereby "reinvesting" the money, postponing taxes, and avoiding transaction fees. An investor who wants or needs the income can sell shares back to the firm with no or very low transaction fees and often at a price that is slightly higher than the market value.
From the firm's point of view, the effect on stock price of omitting a dividend is often devastating, while there seems to be no equivalent penalty for not offering to repurchase shares.
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A. stories B. artifacts C. symbols D. rituals
For accounting purposes, the business entity should be considered separate from its owners if the entity is
A) a corporation B) a proprietorship C) a partnership D) all of the above
The addition of a redundant constraint lowers the isoprofit line
Indicate whether the statement is true or false
Any failure of a bank to honor a check because it would create an overdraft is a wrongful dishonor.
Answer the following statement true (T) or false (F)