Definition of 'Share Buy-back'
Companies will buy back shares either:
1 = to increase the value of shares still available (reducing supply)
2 = to eliminate any threats by shareholders who may be looking for a controlling stake.
Share buy-backs also reduce shareholders' equity. As a result, buy-backs also give an artificial boost to ROE.
Companies will buy back shares either:
1 = to increase the value of shares still available (reducing supply)
2 = to eliminate any threats by shareholders who may be looking for a controlling stake.
Share buy-backs also reduce shareholders' equity. As a result, buy-backs also give an artificial boost to ROE.
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