What are some considerations before a company decides

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Reference no: EM133328244

Case: There are several reasons a company will buy-back their stock. A company may buy-back stock to affect market share or improve their EPS. The buy-back represents some form of strategy by a company. Two articles are attached that discuss reasons why a company will buy-back their own stock. One particular note by the authors in both listed articles is that a stock buy-back is a good financial move for the company and investors. The article "Investment Commentary" by Preston (2001) noted that a stock buy-back can be perceived as a sign of company growth. Zwerdling (1969) discusses several reasons a company may buy-back their own stock.

Question: Based on the articles, it appears that there are more positive indicators than negative for a company stock buy-back. What are some considerations before a company decides to perform a stock buy-back?

Reference no: EM133328244

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