What is the likely impact on a typical individual investor if a firm undertakes a stock repurchase in lieu of a cash dividend?

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If a firm undertakes a stock repurchase in lieu of a cash dividend, the typical individual investor may experience lower income taxes, if capital gains tax rates are less than dividend tax rates. This is because when a stock is repurchased, the investor may be able to sell their shares at a higher price than they purchased them for, leading to a capital gain. Capital gains are typically taxed at a lower rate than dividends, which may result in lower taxes for the investor. However, it is worth noting that a stock repurchase may also result in a lower share price, which could offset any potential tax benefits.

What Is the Likely Impact on a Typical Individual Investor