When a company buys back some of its shares and the amount used to pay dividends remains the same after the buyback,the return on each ordinary share will:
A) increase
B) decrease
C) remain the same
D) it depends

Question

Quizplus · Accepted Answer

If a company buys back some of its shares and the amount used to pay dividends remains the same after the buyback, it means the total amount of dividends is now being distributed among a lower number of outstanding shares. This results in an increase in the return on each ordinary share.

When a Company Buys Back Some of Its Shares and the Amount