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Market cap is calculated by outstanding shares * share price. A company buying back its shares shouldn't affect the outstanding shares figure, because it alread
by coralreef 12y ago
Market cap is calculated by outstanding shares * share price. A company buying back its shares shouldn't affect the outstanding shares figure, because it already includes it.
However now that there are less publicly available shares available on the market, the share price should go up, as long as there is demand. By how much, I don't know, perhaps it ends up making Apple more valuable.
- tinkerrr 12y agoWhen a company buys back shares, the number of outstanding shares decreases. That's the whole reason for buying back shares. See http://www.investopedia.com/articles/investing/112013/impact-share-repurchases.asp http://www.investopedia.com/articles/investing/112013/impact... for a basic introduction to share buybacks.
- coralreef 12y agoI see, so even if outstanding shares is reduced, each share becomes "more valuable" as EPS will improve. So perhaps the market cap will end up balancing itself out?