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fancyfredbotyesterday at 10:16 PM1 replyview on HN

In theory a dividend is also price neutral. You have the dividend now but the company you owned doesn't any more.

However, if someone gives you a dividend you typically have to pay tax, and lots of people really hate paying tax.

So buybacks are the preferred price neutral way of dealing with excess cash.


Replies

paulddraperyesterday at 11:37 PM

The dividend amount plus share price is neutral.

But before-paying-dividend versus after-paying-dividend decreases the value of a share.