Respuesta :
A(n) share repurchase exists an alternative approach to cash dividends which exists used to pay out a firm's earnings to shareholders in the form of a cash payment.
What is share repurchase?
A cash dividend is a payment made from the corporation's current earnings or accumulated profits to stockholders in general. Instead of being distributed as a stock dividend or another kind of value, cash dividends are paid in cash. Because they raise shareholders' net value by the dividend amount, cash dividends are regarded as assets.
For a variety of reasons, a firm may decide to buy back its outstanding shares. Repurchasing outstanding shares can lower a company's cost of capital, take advantage of a stock's short-term undervaluation, consolidate ownership, boost key financial indicators, or free up cash to pay executive bonuses.
In order to maintain stock prices, bring stock prices back to their true worth, improve financial ratios, or lower the cost of capital, a corporation may repurchase its shares. Stock buybacks are advantageous to investors because they frequently replace dividends.
Hence, A(n) share repurchase exists an alternative approach to cash dividends which exists used to pay out a firm's earnings to shareholders in the form of a cash payment.
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