a share buy back, page-24

I simplified it a bit before in the past but the reality is in a company you have

Net Assets = Net Liabilities + Owners' Equity

Lets say a company has $10 bill assets $5 bill liabilities and $5 bill Owners Equity @ 1$ each

book value per share is 10/5 = $ 2 per share

Owners' equity, also called capital, is any debt owed to the business owners.

If a company buys it's own shares, lets say 2 bill then 2 bill from the cash asset gets reduces 2bill of Owners equity

so you are left with

8 bill net assets = 5 net liabilities + 3 bill owner equity

book value per share is 8 / 3 = $ 2.66 per share

so a share buy back increases book value per share.

In addition in a public company you have market value of the shares and the shares may be worth $1 on the market but an increase in book value to $2.66 would also restrict supply and increase stock price further.

Ryan