Question: Explain why the following statement is wrong: The main reason why some companies prefer to return cash to shareholders through stock repurchases, rather than dividends,

Explain why the following statement is wrong: "The main reason why some companies prefer to return cash to shareholders through stock repurchases, rather than dividends, is because repurchases reduce the number of share outstanding and thus tend to increase the stock price."

Please clearly explain your answer in details so that I can learn from your solution.

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