a share buy back, page-32

Casual_Investor,

In all companies

assets = liabilities + owners equity

so in millions the OZ Minerals case

so if net assets are 7,927.1
liabilties are 1,462.1
and owners equity is 6,465.0

7,927.1 = 1,462.1 + 6,465.0

if the shares are $1.90 each then roughly 3402 mill shares means book value per share is 7,927.1/3402
= $2.33 per share

after a 1 bill buyback

so if net assets are 6,927.1
liabilties are 1,462.1
and owners equity is 5,465.0

6,927.1 = 1,462.1 + 5,465.0

if the shares are $1.90 each then roughly 2876 mill shares means book value per share is 6,927.1/2876
= $2.41 per share

An increase in book value of 8cents a share.

Combine this book value increase with the restricted supply of the shares as calculated previously an increase of from 1.90 to 2.54 of 64 cents.

The laws of supply and demand is not a theory but real.

Both of these increases in book value and restricted supply would result in a share price increase unless other market facters that would drive the the stock price down anyway play a part.

The market capitalisation does not change because no value is destroyed by performing a share buy back. There is still the same amount of total market value chasing fewer shares.

When a company reduces the amount of shares outstanding by declaring a stock buy back program, each of your shares becomes more valuable and represents a greater percentage of equity in the company.