A dividend method that many tech companies favor in order to have more tax efficiency, boost earnings per share and signal that the company has more productive uses for its cash than paying dividends is ____.
A) stock splits
B) reverse stock splits
C) dividend payout
D) stock buybacks

Question

Quizplus · Accepted Answer

The dividend method being described is stock buybacks, where the company buys back its own stock from shareholders instead of paying out dividends. This can boost earnings per share because there are fewer shares outstanding, and can also signal that the company has more productive uses for its cash, such as investing in research and development or acquiring other companies. Additionally, buybacks are typically more tax efficient than dividends.

A Dividend Method That Many Tech Companies Favor in Order