Can you please explain how buyback scheme affect EPS? As I have done some searching and found out that buyback scheme will reduce the number of outstanding shares of the company in the market. However, EPS is calculated on total shares issued. Thus, how can the scheme increase the EPS?
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Buyback scheme
2y ago#1There are less shares in issue
THEREFORE
Earnings of say $5m split between 10 m this is 0.50 EPS
Then they buy back say 1m shares
So earnings $5m split between 9 m this is 0.55 EPS
Okay, got it! Thank you!
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