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Can company buy its own share?

Updated: 9/15/2023
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14y ago

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Yes, the company can buy shares and then 'retire' them. Essentially, this lowers the count of outstanding shares for people to buy, which is a good thing. It will increase the percentage ownership of existing shareholders, and it will increase the earnings per share. Increased earnings per share may allow a company to increase its dividends to shareholders, if the company pays these out. The executives of a company (insiders) may also purchase shares in their own company, and this is legal to do, assuming they did not have 'material information' that was not known to the public. This is also a good thing since it shows that the company members think the stock price is a good value, and that they are motivated for the company to succeed.

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