2006-06-10 21:47:44 · 8 answers · asked by Anonymous in Business & Finance ➔ Corporations
To help RAISE the share price by reducing outstanding shareholder equity which is debt!
2006-06-10 21:49:33 · answer #1 · answered by PoppaPack 2 · 1⤊ 1⤋
There are numerous reasons.
1. The company has nothing else to spend cash on, so it uses excess cash to buy back shares as a sign of health. There are some tax benefits if the buyback is not too large. I haven't looked this up in a while.
2. They may be doing it as part of a poison pill to fend a takeover. An increase in debt would deter some buyers and make the acquisition possibly more expensive.
3. The shares may be cheaper than they want so they buy some to raise the price.
4. Management may be selfish and wants to temporarily increase the price so that they can cash in some options.
The list goes on.
2006-06-12 11:33:11 · answer #2 · answered by Arbitrage 7 · 0⤊ 0⤋
When they're being sold below the value the company believes they're worth...
Can also avoid a hostile takeover by another company by holding over 50% of the Company's shares!
2006-06-11 04:52:28 · answer #3 · answered by AlbertaGuy 5 · 0⤊ 0⤋
to decrease dilution of the share value by there being less shares in circulation. if there are less shares in circulation for a company then these shares have more value and are more likely to rise in value.
2006-06-11 04:50:43 · answer #4 · answered by great gig in the sky 7 · 0⤊ 0⤋
To make a loop to raise its shares
2006-06-11 04:57:17 · answer #5 · answered by Farhad 2 · 0⤊ 0⤋
hi
the company may do it so as to control the external control of the company by others.
2006-06-11 04:50:37 · answer #6 · answered by mukunth 2 · 0⤊ 0⤋
Jordan
to raise its market value.
2006-06-11 06:30:55 · answer #7 · answered by jordan1call 3 · 0⤊ 0⤋
To stop you getting any!!
2006-06-11 04:54:42 · answer #8 · answered by Anonymous · 0⤊ 0⤋