Stock repurchase, Finance Basics

Stock Repurchase

The company can buy back also several of its outstanding shares instead of paying cash dividends. This is identified as stock repurchase and or bought back or shares repurchased are called treasury Stock. If several outstanding shares are repurchased, fewer shares would remain outstanding.

By assuming repurchase does not adversely affect firm's earnings, E.P.S. of share would go up. This would conclusion increase in M.P.S. so capital gain is substituted to dividends.

Posted Date: 1/31/2013 2:46:50 AM | Location : United States

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