search query: @indexterm shares / total: 249
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| Author: | Pettit, J. |
| Title: | Is a Share Buyback Right for Your Company? |
| Journal: | Harvard Business Review
2001 : APR, VOL. 79:4, p. 141-148 |
| Index terms: | SHARES MARKETS PURCHASING |
| Language: | eng |
| Abstract: | The author has found that managers routinely underestimate how many shares they need to buy to send a credible signal to the markets, and he offers a way to calculate that number. The author also goes through the iterative steps involved in working out how many shares must be purchased to reach a target level of debt. Then he takes a look at the advantages and disadvantages of the three most common ways that companies make the actual purchases - open-market purchases, fixed-price tender offers, and auction-based tender offers. When a company's performance is lagging, a share buyback can look attractive. Unfortunately, a buyback can backfire-un-less executives understand why, when, and how to use this powerful and risky tool. |
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