Shareholders may prefer a share repurchase program to dividends because dividends are subject to taxation and increasing value per share due to repurchase programs is tax deferred.

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Shareholders may prefer a share repurchase program over dividends because dividends are typically taxed as ordinary income, whereas the increase in value per share due to a repurchase program is not taxable until the shareholder sells their shares. This tax deferral may be seen as a benefit by some investors.

Shareholders May Prefer a Share Repurchase Program to Dividends Because