Question
Assume that the shareholders of a company anticipate receiving a normal dividend. What benefit would shareholders receive if the company instead repurchased shares with the
Assume that the shareholders of a company anticipate receiving a normal dividend. What benefit would shareholders receive if the company instead repurchased shares with the same total amount of dollars that would have been spent on dividends? Assume that the PE ratio is maintained under either scenario.
Group of answer choices
Shareholders can delay or reduce taxes.
It is cheaper for shareholders to sell existing shares for cash than it costs to reinvest cash dividends.
The shareholders benefit because there are a greater number of shareholders.
There is no benefit to current shareholders.
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