 Of course, the market will not necessarily respond to a dividend payment by selling off shares and reducing share price; while the payment of the dividend technically reduces the company's book value, the ability and willingness to pay a dividend is often seen positively, and the share price may even increase.Compare this with spending $100,000 buying back shares.This will remove 10,000 shares from the market, leaving 990,000 shares at $10 each (($10,000,000 − US$100,000)/990,000 = $10).