Share on email The pace of stock buybacks among companies in the S&P 500 has fallen by $106 billion in the space of five quarters, to below pre-pandemic levels.Stock repurchases are sometimes financed out of profits, but when they're not they're a way of building leverage.
When rates are low, companies borrow money cheaply and use that money to buy back their stock. The amount of debt outstanding goes up while the amount of equity outstanding goes down — a tried-and-true way to goose stock returns, or at the very least prevent dilution from massive equity grants to executives., given that it's one of the few areas where lawmakers on both sides of the aisle are OK with raising taxes in the face of fiscal constraints.
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Source: Investingcom - 🏆 450. / 53 Read more »
Source: Investingcom - 🏆 450. / 53 Read more »