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Special Episode: What’s Wrong with Buybacks?

All Else Equal: Making Better Decisions

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Returning Money to Investment Club Members

The club had a thousand dollars stashed on a bank account. All they did was take ten dollars from every member. They have a thousand dollars, and now they wish to return it. The other way is to do a stock purchase. So yes, by buying back shares, the supply of shares is reduced, but so is the total claim. And so when a firm buys fact as, there's no reason at all for the stock price to change.

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