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to expand, since Dividends are taxed immediately, you can only reinvest the nontaxed portion, whereas with buybacks, you effectively reinvest the entirely amoun
by hkmurakami 12y ago
to expand, since Dividends are taxed immediately, you can only reinvest the nontaxed portion, whereas with buybacks, you effectively reinvest the entirely amount and can have better compound returns.
Also, some people will need dividends for cash flow needs.
- nandemo 12y agoI think that's mistaken. You can invest the not-yet-taxed amount, but eventually you're gonna pay the tax. The real advantage (apart from the lower rate) is that the taxes are deferred.