As an investor, which type of dividend would you prefer - cash or stock? Which scenario would each o

Aug 17th, 2016
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As an investor, which type of dividend would you prefer - cash or stock? Which scenario would each one be best in?

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Answer------------------OverviewThe basic answer is that share repurchases are great when the share price is undervalued, andnot-so-great when the share price is overvalued. To put it into a more useful context, if youwould otherwise reinvest your dividends or invest new capital into the company at currentstock prices, then share repurchases are useful to you because the company basically does itfor you. The alternative is that the company could pay you a higher dividend, but youd betaxed on that dividend and reinvest it into the company anyway. On the other hand, if youwould not reinvest dividends or invest new capital into the company at current prices, thenshare repurchases are not in alignment with your current outlook, and it would be better foryou to receive a higher dividend.Something else to be considered is that when a company uses money for share repurchaseswhen i

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