Or Harvard Business Review https://hbr.org/2018/03/are-buybacks-really-shortchanging-investment https://hbr.org/2018/03/are-buybacks-really-shortchanging-in...

Or Harvard Business Review https://hbr.org/2018/03/are-buybacks-really-shortchanging-investment https://hbr.org/2018/03/are-buybacks-really-shortchanging-in... Companies choose how much equity capital to put to work based on - the investment opportunities they have; - the availability and cost of equity capital; - the availability and cost of alternative capital (i.e. debt which is generally cheaper for well-established firms that generate cash flow); - the leverage or financial risk profile that makes sense, (companies with more stable cash flow may use more debt v. equity) When companies have large growth opportunities, have negative cash flow, and the stock price is high/equity cost of capital is low, they increase equity capital. (e.g. Tesla selling stock) When cash flow turns positive, reinvestment opportunities diminish, the stock price is low, they return equity capital. (e.g. Apple paying a dividend and buying back stock) How you return the capital is an accounting/tax decision. There's nothing very special or evil about doing it by buying back stock. Aside from tax issues, no difference vs. paying a dividend. If the tax on capital gains is the same as on dividends, dividend forces the shareholders to have a taxable event, whereas the buyback lets shareholders choose whether to sell back to the company at a given time/price.