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Share Repurchase Plan

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share repurchase plan
A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and that its shares are undervalued. Repurchase of the shares will decrease the amount of outstanding capital stock, increase earnings per share, and, it is hoped, result in an increase in the price of the stock.
Share Repurchase Plan
A plan for a publicly-traded company to buy its own shares from shareholders. This is done to reduce the number of shares outstanding, which increases the earnings per share. Ideally, this will increase the share price. Share repurchase is common practice when the company's management believes that its shares are undervalued. It may also be used as an antitakeover measure.


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