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I want to make sure that I understand the accounting when it comes to stock buy backs and the book value of a company. Imagine the XYZ (a made up name) is trading at $200 per share. Its books value per share is $50 per share. The company then decides to buy back 10 shares at $200. For accounting purposes you are paying $150 a share more than book value hence the book value of the company will go down by $1500. How much the book value per share goes down will be a function of how many shares are outstanding. Do I have that right?

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    Yes - and the exact function should be fairly straightforward - you have the new total book value and the new number of shares, which is a function of the existing number of shares. However I fail to see the relevance to personal finance, just an interesting math problem.
    – D Stanley
    Nov 9, 2022 at 22:17
  • @DStanley I use the book value per share of a corporation as part of my stock selection criterion. That is, I like to see stocks with increasing book value.
    – Bob
    Nov 10, 2022 at 0:47

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'Book Value' of a company's Share account on the balance sheet is purely a reference to the original cash received when those shares were first released to the public. Buy back half those shares, and reduce the Share account by 50%. Simple as.

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