Talk:Share repurchase/Archives/2013

Fuzzy math?

The article states "An investor with 10 shares will receive 85c. As the company has to pay out this money the share price drops according, from $10 to $9.90, so the investor with 10 shares now has; $99 + .85c dividend; or; $99.85."

That makes no sense because the dividends don't come out of the price of the stock, they come out of the excess cash flow of the company. In fact, stock prices can rise after a dividend payment, assuming the value of the dividend attracts new investors and decreases the number of outstanding shares. This section needs to seriously be clarified or removed due to it being potentially inaccurate. Jsliwinski (talk) 15:51, 24 November 2008 (UTC)

No- it isn't wrong. When dividends are paid out from a company, the value of the company declines by that amount, and so the value of the shares drops. However, we all know that the value of something in the market need not correspond to its price, and market volatility can be greater than the size of the dividend, so it may not always be visible without looking back several years and throwing statistics at it. But on average there will be downward pressure on the share price.

If this wasn't true, it would be easy to buy shares on the day before they went "ex dividend", take the dividend, and sell the shares for the same price on the ex dividend day. —Preceding unsigned comment added by Financial Phil (talk • contribs) 13:27, 21 May 2010 (UTC)

Merge with other article?

The article "Accelerated Share Repurchase" describes a special kind of share repurchase. Should it not be included into this article? —Preceding unsigned comment added by 141.2.117.248 (talk) 00:32, 8 March 2011 (UTC)