QM020 - Why Companies Buy Back Stock


Hi All,

People love to criticize companies that buy back a lot of their own stock. If a company has to declare bankruptcy during a recession because they depleted their cash reserves by buying back too much stock, then why should that company be bailed out? It’s certainly fair to a degree.

But why do these companies buy back so much stock in the first place? Why do they feel the need to? That’s the topic for today.

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