I am implementing an AEG model based off Ohlson (2005). The formula is as follows:

$$ V_0 = \frac{E_t}{k} + \sum_{t=1}^n{\frac{1/k * (E_{t+1} - (1+k)E_t+kD_t)}{(1+k)^t}} $$

I'm debating how share repurchases impact my formulation of D. I've read conflicting views.

Stowe proves mathematically that you should not need to include share repurchases:


Damodaran shows how it is essential to include share repurchases to get reasonable numbers (page 336):


Should I include share repurchases in my DPS number or not, and are analyst per-share consensus estimates also expected to also include capital transactions?


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