Share repurchases are not part of the stock valuation process because by definition the cash flow from a share repurchase ends the investment as the stock is no longer owned by the shareholder.

Question

Quizplus · Accepted Answer

Share repurchases can have an impact on the stock valuation process and should be considered. Repurchasing shares reduces the number of shares outstanding, which can increase earnings per share and potentially lead to a higher stock price. However, it is important to consider the reasons behind the share repurchase, such as returning excess cash to shareholders or attempting to manipulate the stock price.

Share Repurchases Are Not Part of the Stock Valuation Process