Show That a Stock Repurchase Is Conceptually the Same as a Cash

Show that a stock repurchase is conceptually the same as a cash dividend for a shareholder with 100 shares using the following example: Repo Corp. has 1,000 shares outstanding at a market price of $20 per share. In debating whether to declare a 5% cash dividend, the directors instead chose to repurchase 50 of the outstanding shares.

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Cash dividend: 5% cash
Shareholder posit...

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