Quote from: theonewhowaskazu on August 01, 2014, 09:19:24 PM

Actually its a terrible point for reasons I just finished explaining.

Say you hold $11 in stocks today.
Or you hold $10 in stocks + $1 in dividends.

The NPV of BOTH THESE ITEMS is the same, even though the $1 in stocks is in stocks not cash. Why? Because if the NPV of that $1 worth of stock wasn't $1, then it wouldn't trade for $1. Yes, the NpV of $1 today is worth more than $1 tomorrow, but the NPV of $1 today and $1 in stocks today IS the same (primarily because you could just liquidate the stock if you really wanted to.

This is not true. The present value of cash today is higher then the present value of cash tomorrow. A dividend allows a shareholder to receive cash today while still owning the same percentage of the company. A share buyback allows a shareholder to give up future cash flow in exchange for cash today.