EOC question 49.
I see how B is an appropriate answer, but answer C seems to best fit the question.
How is C not the answer?
To me report 3 (answer C) seems to be internally inconsistent. If you assume a growth rate of 4.5% for the earnings of utility companies and a 2.5% GDP growth rate you will eventually end up in a situation where your utilities are bigger than your economy. At least if you are taking both of these growth rates as terminal growth rates.
Also, another way to look at why B is the answer is because increasing the frequency of share repurchases is equivalent to increased dividends since both leave shareholder wealth unaffected. Also, higher repurchases means that the company has reached a saturation point as companies have no more to reinvest and will just distribute earnings to shareholders.
Hope this adds value.