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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › chapter 19 test
share repurchase scheme? whats that sir. and why may it increase EPS and Gearing?
A share repurchase scheme is when the company buys shares from shareholders and cancels them (so there are now fewer shares).
With fewer shares, the earnings per share will increase (because you are dividing the earnings by fewer shares).
With fewer shares, the equity reduces and therefore the gearing increases.
