Question

Do you think companies buying back their stock is out of control? Why or why not?

Do you think companies buying back their stock is out of control? Why or why not?

Homework Answers

Answer #1

No, I do not think so.

Companies buy back their stocks to boost the share price, this is a strategy of wealth maximization where shareholders wealth is maximized by boosting current share price by buying it back from the stock market. When company's share price is down or is not moving past few month, it is not giving capital appreciation to shareholders then company repurchases it from market so that number of shares will shrink and per share value will increase. Companies do so for betterment of shareholders. When company announces buys back stocks, per share value increases because investors start buying that share.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why do you think companies compensate employees through various types of stock (warrants, options, etc.)? Why...
Why do you think companies compensate employees through various types of stock (warrants, options, etc.)? Why not just give the employees cash?
Do you think that the following statement is true or false? Buying a single company stock...
Do you think that the following statement is true or false? Buying a single company stock usually provides a safer return than a diversified stock portfolio. True. False. There is insufficient information to answer the question.
“Do you think the unprecedented trillion-dollar federal deficit the Democrats are creating with their out-of-control spending...
“Do you think the unprecedented trillion-dollar federal deficit the Democrats are creating with their out-of-control spending is going to have disastrous consequences for our nation?” Is the above question biased or unbiased? Why? If you consider it to be biased, how would you change this question to an alternative unbiased form?
Do you think stock markets are efficient? If so, why? If not, why not?
Do you think stock markets are efficient? If so, why? If not, why not?
Why do you think entities resort to countertrade instead of buying/selling the traditional way by exchanging...
Why do you think entities resort to countertrade instead of buying/selling the traditional way by exchanging consideration such as money?
Why do you think the Control of Non-Conforming Product is an ISO Mandatory Procedure?
Why do you think the Control of Non-Conforming Product is an ISO Mandatory Procedure?
What do you think is your consumer buying behavior? What factors do you think shape your...
What do you think is your consumer buying behavior? What factors do you think shape your buying behavior?
Why do companies split their stock? Why do shareholders like stock splits?
Why do companies split their stock? Why do shareholders like stock splits?
Why do you think counterfeiting is so popular in places like India? Have you had any...
Why do you think counterfeiting is so popular in places like India? Have you had any experience buying counterfeit goods? What are companies doing to fight against counterfeit products?
do companies ever buy back shares, say they buy back 1000 shares, only to resell the...
do companies ever buy back shares, say they buy back 1000 shares, only to resell the 1000? why would they do that, maybe at at higher price? what would they do if they keep some of them as treasury stock? why would a company ever retire stocks?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT