Share Buybacks - Why Do Companies Buyback Stock? - Episode 11

Share buybacks are very common in the financial world and it is where companies buyback their own stock. They can then offer this stock to employees, re-issue it at a later date or retire the stock. Reasons for doing these stock buybacks include the fact that it improves the companies financials (such as ROE, ROA and EPS), it reduces outstanding stock which also helps reduce the dilution of the stock and the stock may be excessively cheap at the time of purchase.