3. Dividends versus stock repurchases Aa Aa Ignoring possible tax effects and signaling costs, the total value of a firm's equity remains the same irrespective of how the firm distributes its residual earnings-dividends or stock repurchases. Each distribution method has certain advantages and disadvantage Based on your understanding of dividends and stock repurchases, select the best terms to go with the statements. Select the best term to complete the sentence Sell Buy Repurchases give stockholders a choice to ???? their stock and realize their capital gains or keep their stock and receive future dividends False True Repurchases are more dependable than dividends because the investor wealth does not decrease after a repurchase, whereas the stock price decreases when dividends are distributed. This statement is ???? Avoid Encourage Management tries to maintain consistent, regular dividend distributions to ???? any dividend cuts in the future and prevent a negative signaling effect. Debt-to-equity Liquidity ratio Repurchases are also used to make significant adjustments to a firm's ?2?? ratio