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Corporations investing in both debt and equity securities. But, one interesting activity in the current investment...

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Accounting

Corporations investing in both debt and equity securities. But,one interesting activity in the current investment world iscorporate “stock buybacks.” Do a little research and see if you canfind out why corporations are doing this at such a frenzied paceand what the effect is on both the corporation and the stockholderswho are selling their stock back. Do you have any feelings eitherway on this practice? (Short paragraph please)

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4.3 Ratings (940 Votes)
Share buybacks stem from the assumption that the job of management is to maximize shareholder value Therefore the thinking goes whenever management cannot find investment opportunities whose return exceeds the cost of capital that management should instead return the capital to its shareholders    See Answer
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