Investment Banking

Buyback of shares

Share repurchase is the re-acquisition by a company of its own shares. It represents a more flexible way of returning money to shareholders. The buyback ratio considers the buyback dollars spent over the past year, divided by its market capitalization at the beginning of the buyback period. The buyback ratio enables a comparison of the potential impact of repurchases across different companies. It is also a good indicator of a company’s ability to return value to its shareholders since companies that engage in regular buybacks have historically outperformed the broad market.