Benefits of Share Buyback: How Companies and Investors Gain

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Share buyback is a strategic financial move where a company repurchases its own shares from the market. This process provides numerous benefits to both companies and investors. For companies, buybacks help boost earnings per share (EPS), improve stock prices, and utilize surplus cash efficiently. For investors, it often leads to an increase in the value of remaining shares, as the buyback reduces the total share count. Additionally, share buybacks can signal that the company believes its stock is undervalued, fostering investor confidence. This move can also optimize capital structure by improving financial ratios and offering tax benefits in certain cases.