Question

Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between declaring dividends and repurchasing shares, managers may opt to repurchase shares as it is not a taxable event for them unless they sell their shares and with fewer shares outstanding, the stock price will likely rise. The company's investors may prefer dividend payments.

This is an example of what theory is in action?

Answer 1

The above is an example of theory is in action which is difference between Dividends and Buybacks.

What is a dividend?

Dividends are leftover of a company's profit paid to shareholders. It is what is paid to those who own shares in a company at the end of the financial period.

It is to be noted that companies reward their shareholders by paying dividends or by buying back shares of stock.

Learn more about dividends here: https://brainly.com/question/3161471

#SPJ1