What Are the Different Ways a Firm Can Repurchase Shares

question 31

Essay

What are the different ways a firm can repurchase shares?

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Definitions:

Dividend

A part of a company's profits distributed to its shareholders, usually four times a year.

Share Repurchase

A process where a company repurchases its own stock from the market, leading to a decrease in the total shares available publicly.

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their holdings in a stock rather than relying on the company's dividend payments.

Dividend Reinvestment Program

A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.