Stock repurchases reduce the number of shares outstanding,thereby increasing earnings per share.

Name: Stock repurchases reduce the number of shares outstanding,thereby increasing earnings per share.
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Question

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When a company buys back its own shares, the number of shares outstanding decreases, but the earnings of the company remain the same. As a result, the earnings per share (EPS) increase because the same earnings are being divided among a smaller number of shares.

Stock Repurchases Reduce the Number of Shares Outstanding,thereby Increasing Earnings