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Show that a stock repurchase is conceptually the same as a cash dividend using the following example: Repo Corp. has 1,000 shares outstanding at a
Show that a stock repurchase is conceptually the same as a cash dividend using the following example: Repo Corp. has 1,000 shares outstanding at a market price of $20 per share. In debating whether to declare a 5 percent cash dividend, the directors instead chose to repurchase 50 of the outstanding shares. |
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