Share repurchase

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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November 24, 2018 at 10:29 pm #485857
sm8980
Participant
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Hi,

Please could you let me know how a share repurchase scheme can increase earnings per share and gearing? ?

Thank you
November 25, 2018 at 10:01 am #485908
John Moffat
Keymaster
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If shares are repurchased they are then cancelled. So there are then fewer shares in issue, therefore the earnings per share will be higher.
Since there are fewer shares in issue, the total equity is smaller and therefore the gearing ratio will be higher.
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