Where Person X (option holder) prefers O Company to opt for share repurchases or cash dividend to the shareholders. Introduction: Distribution of a portion of earnings by the company to its shareholders is termed as dividends. Share repurchase is an alternative method to pay the cash to the company’s investors by way of buying back of shares. Stock repurchase is where the company purchases its own shares, which are still outstanding.

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Chapter 17, Problem 9P

Summary Introduction

To discuss: Where Person X (option holder) prefers O Company to opt for share repurchases or cash dividend to the shareholders.

Introduction:

Distribution of a portion of earnings by the company to its shareholders is termed as dividends. Share repurchase is an alternative method to pay the cash to the company’s investors by way of buying back of shares. Stock repurchase is where the company purchases its own shares, which are still outstanding.

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