Share repurchases, also known as share buybacks, occur when a company purchases its own shares from the marketplace and hold them as treasury shares. This reduces the overall number of shares outstanding. Companies often buy back shares to boost Earnings Per Share (EPS), dividends per share, return excess cash to shareholders, support a weak market price, or use for employee Stock Options. If a company believes its shares are undervalued, a share buyback can be a sound strategy. By reducing the supply of shares, the price can potentially rise.
Learn Share Repurchases with interactive examples and practice exercises in our Income Statement module.
This interactive learning module helps you understand Share Repurchases through hands-on practice and real-world examples.