2014 April no 5 A company has a substantial cash balance for which it has no immediate use. Which of the following would NOT be a valid reason for it to release this cash to shareholders by means of a repurchase rather than a dividend? A potential tax advantages to the company B potential tax advantages to the shareholders C provision of an exit opportunity for a provider of startup equity D the repurchase can be scheduled for any time of year can i know why the answer is A why C is not suitable as the answer ?
It's A because neither of these means of returning cash to shareholders affects a company's taxable profits.
