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Two part question In a taxless world with no brokerage coasts, repurchases and dividends have the same effect on shareholder wealth. In the real world,
Two part question
In a taxless world with no brokerage coasts, repurchases and dividends have the same effect on shareholder wealth. In the real world, however, repurchases provide more preferable tax treament than dividends to ordinary investors. Does this mean that firms should always use share repurhcases so that investors can gain from this tax benifit? Y/N?
Is it necessary for firms to repurchase stock only on the open market thorugh a tender offer, under which it permits stockholders to send in their shares at a predertimined proce? Y/N
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