All of the following are advantages of share repurchase as a dividend decision EXCEPT:
A)effectively converts dividend income into capital gains income
B)provide firm with greater financial flexibility in timing the payment of returns to shareholders.
C)all current shareholders are able to sell their shares at a higher price
D)they represent a signal to investors that the company expects higher earnings in the future

Question

Quizplus · Accepted Answer

Share repurchase does not necessarily guarantee that all current shareholders will be able to sell their shares at a higher price. The effect on individual shareholders will depend on various factors such as the number of shares they hold and the market conditions at the time of the repurchase. The other options are all advantages of share repurchase as a dividend decision.

All of the Following Are Advantages of Share Repurchase as a Dividend