Dividends and Share Repurchases
12 Pages Posted: 12 Feb 2013 Last revised: 10 May 2023
Date Written: May 9, 2023
The share value is the present value of the expected equity cash flows, and the two main components of equity cash flows are dividends and share repurchases.
We focus on the evolution of dividends and share repurchases on the U.S. stock market, although we also provide some data about other countries.
We show the evolution of the dividend yield of GE, Boeing and Coca-Cola.
We compare the evolution of the yield on 30-year Government bonds and the dividend yield in the United States. Both yields have fallen in the last 30 years.
We compare the evolution of the dividends per share of Coca-Cola and Pepsico with the earnings per share, and we calculate the expected dividend growth of Coca-Cola and Pepsico implicit in the market prices.
Keywords: value, price, dividends, Share Repurchases, equity cash flow
JEL Classification: G12, G31, M21
Suggested Citation: Suggested Citation