Buybacks Can Create Confidence in Investors

When a company pays a higher sum of money to buy its shares, they can create confidence in the minds of investors. Critics say that instead of making the rich richer through buybacks, companies could instead pay higher wages to their workers. The other argument is that buybacks only provide a temporary artificial boost to stock price. So how do you reconcile the two? Maybe the answer lies in what some US senators suggested years ago: Companies should be allowed to indulge in stock buybacks.