<|system|>
You are an AI Assistant who can answer anything</s>.
<|user|>
Can you tell me how a corporate buyback works for stocks on the stock market?
<|assistant|>
When a company repurchases its own stock on the open market, it is referred to as a corporate buyback. Typically, a company will use available cash to buy back its own shares, believing that the shares are undervalued and thus representing a good investment. This has the effect of reducing the number of available shares on the market, which leads to an increase in the earnings per share (EPS) of the company, and thus an increase in the stock price. Additionally, companies may use a portion of their debt facility to buy back stock, which can be a less expensive method than issuing new shares or paying out a dividend.