What Is Share Buyback? Meaning & Example
Definition
A share buyback is when a company repurchases its own shares from the market. It reduces the number of shares outstanding, which can raise earnings per share.
Related terms
Earnings per share is a company's net profit divided by its number of shares outstanding. It shows how much profit is attributed to each share.
DividendA dividend is a payment a company makes to its shareholders, usually from profits. Dividends are typically paid in cash on a regular schedule, but they are never guaranteed.
Stock SplitA stock split increases the number of shares while lowering the price per share proportionally. The total value of your holding stays the same.
What is Share Buyback?
A share buyback is when a company repurchases its own shares from the market. It reduces the number of shares outstanding, which can raise earnings per share.
Can you give an example of Share Buyback?
A company with 100 million shares that buys back 5 million leaves remaining shareholders owning a bigger slice.