Скачать или смотреть What is share Buyback and why company do it?

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Share Buyback, also known as share repurchases is a common method to reward the shareholders.
In the share Buyback company purchases its own share from the public and offer more value to its investor.
Whenever a company thinks that his share price is undervalued not representing the true value, so he repurchases his own share. Generally, whenever the company has excess cash, it could be by retaining his profit, he utilized this excess cash to repurchase the share, the company may go for dividend option but as dividend contains lots of taxes so, nowadays companies are opting for repurchasing of the share option.

Share Buyback is opposite to IPO process, as, in the IPO, the company sells his share to the public and raises fund, In the share buyback, company take back his share from public and provides the return to the investor. Share buyback always takes place at a higher price from the current market price.

It directly increases his control over the company, as one who keeps more share have much control in the decision-making process, therefore it decreases the future possibilities of taking over. It further strengthens the company balance sheet, which results in the increase in price to earnings ratio.
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