Impact of Buyback on the Share Price of Select Companies

Abstract

The acquiring shares of its own stock from the market, a company that collaborates in share buybacks, commonly referred to as repurchases of shares, strives to give back capital to its shareholders.A company seeks to increase earnings per share (EPS) by distributing the same earnings over a smaller shareholder base by decreasing the number of outstanding shares.Companies may also repurchase stock to convey confidence in their financial standing and prospects, which could increase investor confidence and share price.