Which of the following is not one of the advantages of share repurchase as a dividend decision?
A) It effectively converts dividend income into capital gains income.
B) It provides firm with greater financial flexibility in timing the payment of returns to shareholders.
C) All current shareholders can sell their shares at a higher price.
D) It represents a signal to investors that the company expects higher earnings in the future.

Question

Quizplus · Accepted Answer

Share repurchase does not guarantee a higher price for all current shareholders, as the market price of the company's shares may fluctuate depending on various factors. While A, B, and D are all advantages of share repurchase as a dividend decision, C is not accurate.

Which of the Following Is Not One of the Advantages