Date post: | 15-Aug-2015 |
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Do Share buybacks add valueFor Investors: • 30% of present free cash flows to go repurchases• Number of outstanding shares are decreased • Early stage investors makes money • Assets and EPS goes up
For Companies: • Average age of plant and equipment is 22 years• Investment in plant and equipment up to 40%• Free cash flow used to buy back does not increase Corporate performance. It only increases share price.