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What different effects do stock buybacks have on corporate governance compared to dividends? My understanding is both return $X/share of capital to shareholder
by positr0n 2y ago
What different effects do stock buybacks have on corporate governance compared to dividends?
My understanding is both return $X/share of capital to shareholders, buybacks are just more tax efficient, flexible, and a little more difficult to see the direct effect of.
- devman0 2y agoDividends get taxed immediately, so there is more pressure to reinvest profits in the company to find organic growth which is captured as capital gains instead. That reinvestment can take a lot of different forms like R&D, training, hiring, etc.
- positr0n 2y agoMakes sense, but weren't you just saying that the desire for constant growth/capital gains is a bad thing?