Which statement best describes a stock buyback?

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Multiple Choice

Which statement best describes a stock buyback?

Explanation:
A stock buyback is when a company uses cash to buy back its own shares on the open market. This returns capital to shareholders by reducing the number of shares outstanding, which can raise earnings per share and potentially support the stock price for the remaining holders. It differs from a cash dividend, which simply pays cash to shareholders without changing the share count. Large corporations routinely use buybacks, so that part is false.

A stock buyback is when a company uses cash to buy back its own shares on the open market. This returns capital to shareholders by reducing the number of shares outstanding, which can raise earnings per share and potentially support the stock price for the remaining holders. It differs from a cash dividend, which simply pays cash to shareholders without changing the share count. Large corporations routinely use buybacks, so that part is false.

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