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Yes, stock dividends are effectively the same as stock splits, and both should be no-ops (apart from obscure legal differences). But I don't see the game theory
by cousin_it 10y ago
Yes, stock dividends are effectively the same as stock splits, and both should be no-ops (apart from obscure legal differences). But I don't see the game theory angle. Choosing between cash and stock dividend is equivalent to choosing between stock buyback and no-op. In both cases, I don't see why your choice should depend on what other shareholders choose.
- nabla9 10y agoNo they are not. Stock buybacks are effectively same as dividends. If company buys stocks from the market , it increases the value for the shareholders. https://en.wikipedia.org/wiki/Share_repurchase https://en.wikipedia.org/wiki/Share_repurchase
- deleted 10y ago[deleted]
- kgwgk 10y agoWhat do stock buybacks have to do with the distinction between stock "dividends" and cash dividends?
- nappy-doo 10y agoNot quite. Buybacks aren't taxed the same as dividends (in the US). As such, they should be worth more than dividends to the shareholder: (all other things being equal, your ownership stake increases from the buyback).