Why Has the Popularity of Share Repurchases Been Growing Faster

question 121

Essay

Why has the popularity of share repurchases been growing faster than the cash dividends as a method for companies to distribute cash to their shareholders.

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Definitions:

Present Value

The current financial value of money to be obtained in the future or upcoming cash flow payments, quantified by a particular rate of return.

Cash Flows

The total amount of money being transferred in and out of a business, especially as affecting liquidity.

Investment

The expenditure of money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property.

Present Value Factors

Multipliers used to determine the present value of future cash flows by accounting for the time value of money.