Let's say a company has a market cap of $11 million, 1 million shares outstanding, no debt, and $1 million in cash. Right now, if I am an investor, I own some shares that are worth $11 each. If the firm repurchases shares at $11, the stock price will remain at $11 the number of shares goes down proportionally to the decrease in equity. But then why would firms even do this? In either case I would have shares worth $11. Sure, some people might get cash, but couldn't they sell it at $11 in the market anyways?
This is the exact example one of my textbooks gave, and I am not sure what the benefit would be.