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What impact does share extinguishment have on stock prices?

Generally, share extinguishment (especially due to buybacks) may positively impact stock prices as:

  • Fewer shares in circulation can lead to higher Earnings Per Share (EPS).
  • It signals confidence from management about the company’s financial health.
    However, if done due to distress (e.g., financial restructuring), it may negatively impact investor sentiment.

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