THINKING ALOUD
Buybacks vs dividends: Which is better for shareholders?
Companies with surplus cash should weigh which creates most value for investors
AT A recent Singapore Institute of Directors event, participants suggested that companies that have no better use for their excess capital should consider buying back their own shares.
This is an increasingly popular recommendation, and many companies have responded over the past few years by introducing buyback schemes. But is it necessarily best for shareholders?
The conventional argument for buybacks appears to be straightforward.
