Why manager might prefer the purchase of treasury shares to the payment of dividends?

Managers might prefer the purchase of treasury shares over paying dividends because it can enhance earnings per share (EPS) by reducing the number of outstanding shares, potentially boosting stock prices and benefiting shareholders. Additionally, share buybacks offer more flexibility since they can be adjusted based on the company's financial situation, whereas dividends create an expectation for regular payments. Lastly, repurchases can signal to the market that management believes the stock is undervalued, reinforcing investor confidence.