Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between declaring dividends and repurchasing shares, managers may opt to...


Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between<br>declaring dividends and repurchasing shares, managers may opt to repurchase shares as it is not a taxable event for them unless<br>they sell their shares and with fewer shares outstanding, the stock price will likely rise. The company's investors may prefer<br>dividend payments. Glven the discussion in the introduction to the course, this is an example of what theory in action?<br>Type your answer and submit<br>

Extracted text: Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between declaring dividends and repurchasing shares, managers may opt to repurchase shares as it is not a taxable event for them unless they sell their shares and with fewer shares outstanding, the stock price will likely rise. The company's investors may prefer dividend payments. Glven the discussion in the introduction to the course, this is an example of what theory in action? Type your answer and submit

Jun 06, 2022
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