Management has two options to do so - either by paying out a dividend, or earmarking cash to repurchase some of the shares it originally sold as part of a buyback plan. Now, as all good businesses do, it comes time for XYZ to start returning cash to its shareholders. Ultimately, the company grows to the point of generating its own cash. So, management offers investors equity in the company in exchange for cash. For example, company XYZ may show great promise in its early stages – perhaps, it has a disruptive new technology – but lack the funds to deliver on its vision. Simply put, a stock buyback is when a management team, authorized by the company's Board of Directors, repurchases shares in their own company - shares that were initially sold to investors when the company needed funds to grow the business. In fact, an investment in a stock is predicated on the idea it will help a company to grow, generate cash and return a portion of that cash back to the investor. At the Club, however, we prioritize investing in companies that buy back a lot of their own stock. Many politicians have railed against them, arguing companies should spend any excess funds on employees, rather than returning the cash to investors. Share repurchases have become a hot-button issue of late in the U.S. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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