Question
Stock buybacks, also known as share repurchases, is one area of finance that has risen to the height of political debate. Some identify buybacks as
Stock buybacks, also known as share repurchases, is one area of finance that has risen to the height of political debate. Some identify buybacks as a root cause of income inequality and financial fragility in the United States and suggest banning them. Others see repurchases as a normal course of business allowing firms to return cash to shareholders.
To engage in this debate, it is important to be informed. Research stock buybacks and present a summary of the arguments for and against them. First, what is a stock buyback? In other words, summarize what happens when a company repurchases its shares. Second, summarize what you see as the most convincing argument for allowing firms to use stock buybacks. Third, summarize what you see as the most convincing argument to ban the use of stock buybacks. Do you think companies should be allowed to buy back shares or not? why?
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