Originally Posted by
flyboy2181
Right. That example was for easy math. But the point is buying back stock allows you to spend the same amount of money on dividend payouts and still increase dividends. My argument is against people saying they should just increase dividend payouts. It’s a better investment to buy back stock.
No, because the increase in dividend is in no way covered by the decrease of shares of the buyback. That's the scam, when all is said and done, the only benefit is to the exec's participating in the options program, where their awards were based on the higher EPS, and the value not diluted by the share issue. In reality, the shareholders only see a mere fraction of that capital, in most cases in the last decade, long term investors lost money.