Share Repurchases Versus Dividends

This problem tests your understanding of capital allocation choices and how companies return cash to shareholders. In an investment banking interview, you need to think through the tradeoffs between dividends and buybacks, including tax treatment, signaling, flexibility, dilution from stock compensation, and the impact on per share metrics. Interviewers ask this because payout policy reveals how well you understand corporate finance theory, market perception, and the strategic reasons management may choose one form of shareholder return over another.