2007-03-20 20:36:45 · 2 answers · asked by cadet 1 in Business & Finance ➔ Personal Finance
Two reasons
1) Tax considerations. Though the '03 tax cuts flattened this out to a certain degree, money returned to investors via dividends was taxed more highly than money returned to investors via share repurchases (where taxes are deferred until stock is sold.)
2) A lot of executives are compensated via stock options. This means that they have a vested interest in compensating stockholders in a manner that also drives up a stock's price per share.
2007-03-20 20:48:10 · answer #1 · answered by Adam J 6 · 0⤊ 0⤋
when they pay you a dividend, everyone pays more taxes.
taxes decrease your return on your investment
when they repurchase shares it also artificially boosts the companies earnings growth
maybe the company wanted to invest some money and they believe their stock was undervalued.
anyways it is usually a good sign
2007-03-21 08:49:52 · answer #2 · answered by whig 2 · 0⤊ 0⤋