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advantage and disadvantages of company buying back stocks? Discuss its impact on company cash, shares authorized and outstanding, net earnings, EPS, Diluted EPS, Dividends per share, P/E Ratio and...

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advantage and disadvantages of company buying back stocks? Discuss its impact on company cash, shares authorized and outstanding, net earnings, EPS, Diluted EPS, Dividends per share, P/E Ratio and stock price.
Answered Same Day Oct 06, 2021

Solution

Sanjukta answered on Oct 06 2021
136 Votes
Running Head: Buy Back Shares         1
Buy Back Shares         4
BUY BACK SHARES
It can be stated that when a firm buys back shares then it results in reducing the number of shares that are outstanding.
The following are some of the advantages:
· Repurchasing the outstanding shares tends to help a business reduce its cost of capital, consolidate ownership or even free up the profits in terms of paying the executive bonuses
· There are a lot of cash but few projects and it is one of the basic considerations for buying back shares
· Buying back shares are also used by the companies as one of...
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