Which action can directly increase the value per share by reducing the number of shares outstanding?

• A. Repurchase stock
• B. Increase dividend
• C. Issue new shares
• D. Conduct a stock split

Answer: (A)

When a company buys back its own shares, the number of shares outstanding falls while net income stays the same. That means earnings per share (the profit allocated to each remaining share) rises because you’re dividing the same amount of profit by fewer shares. A higher EPS often supports a higher price per share, so the per-share value moves up directly as the share count declines. The other actions don’t reduce the number of shares outstanding: increasing dividends doesn’t change share count, issuing new shares increases the float and dilutes per-share metrics, and a stock split changes the price and share count but doesn’t reduce the overall number of shares outstanding in the way a buyback does.