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Technology Stocks : Dell Technologies Inc.

DELL 120.60

+1.8%

3:59 PM EST

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To: Moominoid who wrote (80617)	11/16/1998 8:19:00 PM
From: BGR	Read Replies (1) of 176387

David, Indeed, differential tax treatments are usually the main reason why corporations choose buybacks over cash dividends. As for the future earnings distributed over fewer shares, I first thought the same too till CTC pointed out my error. Think of it this way, calculate the NPV of all future earnings and then treat that as a fixed asset outside of cash. After that, the same analysis that I had presented earlier shows that share price should remain same if the buyback price is equal to the market price. -Apratim.

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