Forum 3 - What Is a Buyback, Stock Buybacks Explained

Forum 3

Prior to beginning work on this discussion forum, read Chapter 5 in the Outsiders and the webpages What Is a Buyback? Stock Buybacks ExplainedLinks to an external site. and Principles of Stock Buyback Programs: Explaining Buybacks and How They Affect Earnings per ShareLinks to an external site..

Many companies implement stock buyback programs in which the corporation repurchases shares from shareholders. A company’s decision to engage in a stock buyback program is a capital allocation decision and results in changing the company’s capital structure.

In your initial post,

• Explain how the decision to implement a stock buyback program could be justified based on capital allocation practices.
• Identify one publicly traded company that engaged in a stock buyback program within the last five years.
• Describe that company’s decision to implement the program, citing evidence from the company’s management.
  • Provide links to any sources using APA StyleLinks to an external site..
• Pose one question regarding your selected company’s stock buyback program.