Either by direct dividend payment or stock repurchase

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A company's stock is currently selling for $20 per share. Suppose you hold 800 of this company's shares that you bought last year at $15.60 a share. The company intends to pay out to its shareholders $1 per share, either by direct dividend payment or stock repurchase. If your income tax rate is 30% and the tax rate in capital gains is 24%, which alternative is better for you? Show your calculations.

Reference no: EM131354960

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