JRK The company buys back shares on the market using cash...

JRK

The company buys back shares on the market using cash reserves.If a company holds high cash reserves it is a way of using those funds.A buy back generally stabilises the share price and shows the company is in its view picking up shares at a decent price.The shares it buys back are then cancelled.Therefore there will be fewer shares on issue.Fewer shares on issue will lead to higher earnings/dividends per share.