Companies sometimes use stock repurchases to increase their earnings per share. This video examines how a share repurchase would affect earnings per share in 3 difference scenarios: Example 1: the company repurchases common shares Example 2: the company repurchases common shares and incurs an excise tax on the repurchase Example 3: the company repurchases preferred shares, thereby decreasing the total dividend paid to preferred shareholders Introduction 0:00 Example 1 (repurchase of common shares) 0:57 Example 2 (repurchase of common shares with excise tax) 3:33 Example 3 (repurchase of preferred shares) 7:06 — Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world. — SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • A 44-PAGE GUIDE TO U.S. TAXATION …
