Subject: Re: So my question is…
"That's what the math says. The second order thinking would address motivations. For example, in the example above management might be more inclined to pay out a dividend before the buyback than after the buyback because they have so much spare cash. It would be relatively rational for them to think about a lower payout ratio after the big buyback."

I see, thank you for your detailed reply! As a long time owner in Philip Morris I was always under the assumption they were saving money on the dividend with buybacks but now, thanks to your explanation, I realise I'm as wrong as I am about my assumptions :-)