Ginger Rogers makes two comments about discounted cash flow models applied to dividends and share repurchases:

Statement 1: Because DDMs do not incorporate the cash flows to investors from repurchases, they systematically understate the present value of future cash flows from a stock and underestimate the true rates of return, which should be based on total cash flows.

Statement 2: Some considerations that might argue against the corporate use of repurchases are their lack of transparency, potential unequal treatment of sellers and nonsellers, and their lesser ability (compared to cash dividends) to discipline managers.

Are Gingers statements correct?

		Yes, both are correct.
		No, both are not correct.
		No, only Statement 1 is correct.
		No, only Statement 2 is correct.