BBs are a way for companies to return money to investors when they don't know what else to do with their cash. That’s called a “dividend”. A dividend is taxed,

BBs are a way for companies to return money to investors when they don't know what else to do with their cash. That’s called a “dividend”. A dividend is taxed, however. I’ll leave the rest as an exercise for the reader. What you want to do is create an artificial incentive for not returning the capital, which will lead to its suboptimal allocation. I truly don’t know what to make of this comment. On the one hand, we are all being mansplained on how stock buy-backs works, yet not one mention of the word “dividend”.