A. The shareholder can choose whether to take the cash or not.
With a repurchase, shareholders can decide to sell (take cash) or keep their shares. A one-off dividend forces all shareholders to receive cash.
C. It means that the company will be able to pay lower total dividends in the future.
After a buyback there are fewer shares in issue. If the company keeps the same dividend per share, the total dividend outlay falls – good for future cash flow and flexibility.
E. It will not create an expectation for future increased dividends.
A large one-off dividend may be interpreted as a permanent increase, creating pressure to maintain higher payouts. A buyback is seen as a more one-off, discretionary event, so it avoids that expectation.
B is wrong: a repurchase reduces, not increases, shares in issue.
D is not an advantage relative to a dividend – both methods return cash that shareholders can spend as they wish.
