# Stock buy backs and book value

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?

• 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. 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