Stock repurchases are like bumper dividends, but they are not typically substitute for regular cash dividends.

Question

Quizplus · Accepted Answer

Stock repurchases and dividends are different ways for companies to distribute their profits to shareholders. While stock repurchases can provide a similar boost to a company's stock price as a dividend, they do not necessarily indicate that the company will stop paying regular cash dividends. In fact, many companies continue to pay dividends even while repurchasing their own stock. Therefore, stock repurchases are not typically a substitute for regular cash dividends.

Stock Repurchases Are Like Bumper Dividends, but They Are Not