# Share Repurchase Impacts in Abnormal Earnings Growth Model (AEG)

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:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1051281

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