A company buying its own shares back from the market
A share buyback is a company purchasing its own shares on the market. Fewer shares remain outstanding, so the same profit becomes a larger amount per share. It is one way of returning spare cash to shareholders, discussed alongside dividends. If the repurchased shares are cancelled, the reduction is permanent.
Buying back 100,000 of 1,000,000 shares raises earnings per share by about 11%.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.