When firms want to distribute cash to shareholders, they can either pay dividends or repurchase outstanding shares. Figure 14.2 plots aggregate dividends and share repurchases from 1971 through 2011 for all U.S. firms listed on U.S. stock exchanges (again, the figure uses a logarithmic vertical scale). A quick glance at the figure reveals that share repurchases played a relatively minor role in firms’ payout practices in the 1970s. In 1971, for example, aggregate dividends totaled $21 billion, but share repurchases that year were just $1.1 billion. In the 1980s, share repurchases began to grow rapidly and then slowed again in the early 1990s. The value of aggregate share repurchases first eclipsed total dividend payments in 1998. That year, firms paid $175 billion in dividends, but they repurchased $185 billion worth of stock. Share repurchases continued to outpace dividends for all but three of the next 13 years, peaking at $677 billion in 2007.