The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Is The Repurchase Of Stock Strategy ?

The Repurchase of stock technique is when the corporation pays cash to the firm's shareholders that provides more preferential tax treatment for shareholders than dividends. Generally, after the repurchase, less stocks are available and the price per share increases. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a , open market, purchase, tender offer or Dutch auction.

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