We have discussed that most firms return capital to their shareholders by a combination of both paying dividends and buying back shares.There are pro's and cons of each.Some Companies only buy back their stock (companies like Gartner, of Stamford which is ticker "IT" and market cap of $14BB, or AutoZone, ticker AZO with a market cap of $26BB).The use of this "capital returned" is an alternative to the companies using their capital for organic growth (fast growing tech companies) or acquiring other assets/companies when they believe the acquisition will add EVA (Buffett's large acquisitions of the last 2 decades are an example).Nonetheless, the decision of how this capital is deployed (grow, return cash via dividends, or return cash via buybacks) comes down to several decisions as what is the ROIC (return on invested capital for the firm) versus that of how investors value that cash (returned) in their pocket.It also involves the "image" of the corporation, tax rates, and other factors (subjective and objective). Sometimes, the decision changes or evolves over time for a company depending upon opportunities, market conditions, and the stage of ROIC for the firm (examples are numerous, but the article from 2 days ago about Buffett buying back stock speaks to just one of these corporate evolutions).

The Question: As an investor why would you prefer the company to use their cash one way or the other (amongst their choices described above), based upon your situation and that of the company?