The September 4, 1995, issue of Fortune includes an article by Richard D. Hylton entitled "Stock Buybacks Are Hot-Here's How You Can Cash In."

\section*{Instructions}

Read the article and answer these questions:

(a) What was the total amount of announced intentions to repurchase shares of stock in 1994? What was this figure during the first 6 months of 1995 ?

(b) The goal of many of these repurchase programs was to increase the price of the remaining outstanding shares. Identify the three factors that will determine the impact of repurchases on share price.

(c) What did Microsoft do with the shares it repurchased? Why might it use repurchased shares for this purpose rather than issuing new shares?