company-buyback-strategy

Vocabulary Word

Definition

'Company buyback strategy' means a company is buying back its own shares from the stock market, often done when the company has extra money and believes its shares are undervalued.

Examples in Different Contexts

In finance, a 'company buyback strategy' involves a corporation purchasing its own shares from the marketplace, reducing the number of outstanding shares. A financial analyst might say, 'The company's buyback strategy could signal to investors that its leadership believes the stock is undervalued, potentially driving up share prices.'

Practice Scenarios

Economics

Scenario:

If a company seeks to increase the price of its shares, it might look at alternatives to dividends for returning profits to shareholders.

Response:

A company buyback strategy could raise the price of shares by reducing their supply in the market.

Business

Scenario:

We need ways to effectively manage our excess cash reserves and strengthen shareholder value.

Response:

Maybe we should consider implementing a company buyback strategy to invest our cash and improve shareholder value.