A Simple Explanation of Repurchasing Shares and How Price, Valuation, & Earnings Growth Shape the Equation
Another way to think about buybacks is leverage where you buying tommorow's net income/free cash flow at today's price. If the firm value grows over time, buybacks are accretive. If the firm value shrinks, buybacks will be dilutive.
Another way to think about buybacks is leverage where you buying tommorow's net income/free cash flow at today's price. If the firm value grows over time, buybacks are accretive. If the firm value shrinks, buybacks will be dilutive.