4 ms·
Not in all regards. The owners don't get any cash without selling stock.
by Ma8ee 4y ago
Not in all regards. The owners don't get any cash without selling stock.
- eru 4y agoTo 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.