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by eru
1379 days ago
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To spell it out, ignoring transaction costs and taxes the following two are economically equivalent: - You own some stock. The company pays dividends. You reinvest the dividends into buying more stock. - You own some stock. The company buys back stock. A different equivalence: - You own some stock. The company pays dividends. - You own some stock. The company buys back stock. You sell stock until your percentage share in the company is the same as before. |
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