Comment by gruez
3 hours ago
>* Large caps prefer to repurchase stocks, stock repurchases contribute fully towards a given company share price increase.
That doesn't work because indices are typically market cap weighted. A stock buyback might increase nominal stock prices, but not the market cap, otherwise it'd be a free money machine.
You are right, but if stock repurchase does not increase market cap, dividend payment still decreases it (unless it would be fully reinvested in the same stock, which it is not, it is largely reinvested in largest caps).