My (half baked) analogy is a sealed fish tank half full of water. The water is the company's non-cash value and the air is its cash. Shares are imaginary vertic

My (half baked) analogy is a sealed fish tank half full of water. The water is the company's non-cash value and the air is its cash. Shares are imaginary vertical slices of cash and non-cash value. A dividend "lowers the lid" of the fish tank. Some amount of air (cash) ends up outside the company, and is returned to each shareholder. A buyback is the same thing, but first you tip the tank on its side before letting some air out. When the tank is on its side, some shares are "all cash" and the others are "all non-cash". Then you shrink the box by taking out some all-cash shares. Then you right the fishtank.