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Why is a share buyback considered a tax-efficient way of distributing earnings?
  • a)
    Shareholders pay lower taxes on dividends from a buyback.
  • b)
    Companies pay lower taxes on dividends from a buyback.
  • c)
    Buybacks are not subject to taxation.
  • d)
    Both companies and shareholders avoid taxes on buybacks.
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Why is a share buyback considered a tax-efficient way of distributing ...
A share buyback is considered tax-efficient because shareholders pay lower taxes on capital gains from selling back their shares compared to taxes on dividends. While dividends may be taxable for both companies and shareholders, capital gains taxation is typically more favorable, especially for individuals.
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Why is a share buyback considered a tax-efficient way of distributing earnings?a)Shareholders pay lower taxes on dividends from a buyback.b)Companies pay lower taxes on dividends from a buyback.c)Buybacks are not subject to taxation.d)Both companies and shareholders avoid taxes on buybacks.Correct answer is option 'A'. Can you explain this answer?
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Why is a share buyback considered a tax-efficient way of distributing earnings?a)Shareholders pay lower taxes on dividends from a buyback.b)Companies pay lower taxes on dividends from a buyback.c)Buybacks are not subject to taxation.d)Both companies and shareholders avoid taxes on buybacks.Correct answer is option 'A'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Why is a share buyback considered a tax-efficient way of distributing earnings?a)Shareholders pay lower taxes on dividends from a buyback.b)Companies pay lower taxes on dividends from a buyback.c)Buybacks are not subject to taxation.d)Both companies and shareholders avoid taxes on buybacks.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Why is a share buyback considered a tax-efficient way of distributing earnings?a)Shareholders pay lower taxes on dividends from a buyback.b)Companies pay lower taxes on dividends from a buyback.c)Buybacks are not subject to taxation.d)Both companies and shareholders avoid taxes on buybacks.Correct answer is option 'A'. Can you explain this answer?.
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