8. Dividends versus stock repurchases 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 disadvantages. Based on your understanding of dividends and stock repurchases, select the best terms to go with the statements. Management is likely to repurchase stock if it believes that the stock is ; this sends positive signals to investors. Dividends provide signals about a firm's future prospects, whereas some investors might misinterpret why a firm is repurchasing stock. True False Repurchases allow investors who need cash to convert their investment in the company into True or False: Repurchases allow a firm to buy back as much stock as it wants, at whatever price it wants, without affecting shareholders. True False