Asked by Rothana Martaa on Apr 28, 2024
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Unlike a stock dividend or a stock split, share repurchase should increase stockholder wealth.
Share Repurchase
The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock and often increasing the value of remaining shares.
Stockholder Wealth
The total value of an individual's or entity's ownership stake in a corporation, measured by the market value of the shares held.
Stock Dividend
A form of dividend payment made in additional shares of the issuing corporation, rather than in cash.
- Learn the reasons driving companies to favor stock buybacks over dividends and the tax effects of such decisions.
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Learning Objectives
- Learn the reasons driving companies to favor stock buybacks over dividends and the tax effects of such decisions.
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