Hi,
The question asks "Which of the following is an economically sound reason for a company to enter into a share repurchase?"
A. Earnings per share tends to be inflated
B. Share repurchases can be efficient from a tax point of view
C. Share repurchases are a powerful sign of confidence to the stock market
D. A repurchase is simpler than increasing the dividend
The Mark scheme says that correct answer is B...
Wouldn't this be beneficial from a tax point of view for the shareholders rather than the company?
The question asks "Which of the following is an economically sound reason for a company to enter into a share repurchase?"
A. Earnings per share tends to be inflated
B. Share repurchases can be efficient from a tax point of view
C. Share repurchases are a powerful sign of confidence to the stock market
D. A repurchase is simpler than increasing the dividend
The Mark scheme says that correct answer is B...
Wouldn't this be beneficial from a tax point of view for the shareholders rather than the company?