Is buyback good for investors?

In most cases, a buyback is good for investors as companies repurchase the shares at a price slightly higher than the market price.

Shareholders benefit from the buyback in the following ways:

• They get a higher value or incentive for the shares.
• The capital gains earned in buyback are tax-exempt.
• Their available liquidity goes up.
• The prices of remaining shares usually go high as the investor confidence is boosted and the number of shares available for trade is reduced.

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