Several Progressive politicians have pounced on corporate share buybacks lately. They see buybacks as a major source of income and wealth inequality, subpar capital spending, and lackluster productivity. In their opinion, buybacks have contributed greatly to the stagnation of the standards of living of most Americans in recent years. So they want to limit buybacks or even ban them.

Some of Wall Street’s stock-market bears have been growling about buybacks as well. They’ve been arguing that buybacks have rigged the stock market in favor of the bulls. They claim that companies buy back their stock to boost their share prices, using debt to finance this dubious activity. As a result, corporate balance sheets have become increasingly leveraged, which makes them vulnerable to a recession. Widespread corporate leverage, in turn, would exacerbate any economic downturn. The bears therefore remain bearish and expect to be vindicated with a vengeance, eventually.

In this study, Edward Yardeni and Joseph Abbott show that the facts don’t support either narrative. The most common reason that S&P 500 companies buy back their shares is to offset the dilution in the number of shares outstanding that results when employee compensation takes the form of stock options and stock grants that vest over time, not just for top executives but for many employees. In effect, the ultimate source of funds for most stock buybacks is the employee compensation expense item on corporate income statements, not bond issuance as the bears contend.

The authors explain that the bull market in stocks has boosted buybacks to a greater extent than buybacks have boosted the market, whereas the opposite is more widely believed. Rising stock prices increase the attractiveness of paying some of employees’ compensation with stock grants. Buybacks then are necessary to offset the dilution of earnings per share. While the latest bull market, like previous ones, has been driven by rising earnings, it’s a Wall Street legend that earnings per share have been boosted artificially and significantly by stock buybacks. It may seem that way only because what lift buybacks have provided to stock prices is highly visible, occurring in the open market, whereas companies’ need to offset stock issuance with stock repurchases is less apparent.

The authors also refute Progressives’ pervasive narrative that most Americans’ standards of living have stagnated in recent decades and that buybacks per se have worsened income inequality.

"About this title" may belong to another edition of this title.

Store Description

Save up to 90% on your favorite items at BargainBookStores.com! Our 20,000 square foot warehouse in Grand Rapids, Michigan is filled with hundreds of thousands of books and consumer goods, all at the lowest prices! We've been serving internet customers with great deals since 2001. All books ship from Grand Rapids, Michigan. 100% Customer Satisfaction Guaranteed We want to ensure your satisfaction. If you are dissatisfied with your purchase or shopping experience, we would like to hear from you. Please contact us by email: cs@bargainbookstores.com. Please be sure to include your contact information and order number. We do not charge a restocking fee for returns. Your Privacy BargainBookStores.com does not provide, sell or market customer information to other businesses or organizations.

Visit Seller's Storefront

Seller's business information

BargainBookStores
3423 Lousma Dr SE, Grand Rapids, MI, 49548, U.S.A.

Sale & Shipping Terms

Terms of Sale

BargainBookStores guarantees 100% Customer Satisfaction. We ship worldwide and offer a variety of shipping methods to meet your needs. Please place your order directly via ABEBooks.com. We accept payment by MasterCard and Visa. For more information, contact us by email at cs@bargainbookstores.com. Full contact info is below:

BargainBookStores.com LLC
3423 Lousma Dr SE
Grand Rapids, MI 49548

Right of cancellation

If you are a consumer you can cancel the contract in accordance with the following. Consumer means any natural person who is acting for purposes which are outside his trade, business, craft or profession.

INFORMATION REGARDING THE RIGHT OF CANCELLATION

Statutory Right to cancel

You have the right to cancel this contract within 14 days without giving any reason.

The cancellation period will expire after 14 days from the day on which you acquire, or a third party other than the carrier and indicated by you acquires, physical possession of the the last good or the last lot or piece.

To exercise the right to cancel, you must inform us, BargainBookStores, 3423 Lousma Dr SE, Grand Rapids, Michigan, U.S.A., 49548, +1 616-301-2349, of your decision to cancel this contract by a clear statement (e.g. a letter sent by post, fax or e-mail). You may use the attached model cancellation form, but it is not obligatory. You can also electronically fill in and submit a clear statement on our website, under "My Purchases" in "My Account". If you use this option, we will communicate to you an acknowledgement of receipt of such a cancellation on a durable medium (e.g. by e-mail) without delay.

To meet the cancellation deadline, it is sufficient for you to send your communication concerning your exercise of the right to cancel before the cancellation period has expired.

Effects of cancellation

If you cancel this contract, we will reimburse to you all payments received from you, including the costs of delivery (except for the supplementary costs arising if you chose a type of delivery other than the least expensive type of standard delivery offered by us).

We may make a deduction from the reimbursement for loss in value of any goods supplied, if the loss is the result of unnecessary handling by you.

We will make the reimbursement without undue delay, and not later than 14 days after the day on which we are informed about your decision to cancel with contract.

We will make the reimbursement using the same means of payment as you used for the initial transaction, unless you have expressly agreed otherwise; in any event, you will not incur any fees as a result of such reimbursement.

We may withhold reimbursement until we have received the goods back or you have supplied evidence of having sent back the goods, whichever is the earliest.

You shall send back the goods or hand them over to us or BargainBookStores, 3423 Lousma Dr SE, Grand Rapids, Michigan, U.S.A., 49548, +1 616-301-2349, without undue delay and in any event not later than 14 days from the day on which you communicate your cancellation from this contract to us. The deadline is met if you send back the goods before the period of 14 days has expired. You will have to bear the direct cost of returning the goods. You are only liable for any diminished value of the goods resulting from the handling other than what is necessary to establish the nature, characteristics and functioning of the goods.

Exceptions to the right of cancellation

The right of cancellation does not apply to:

the delivery of newspapers, journals or magazines with the exception of subscription contracts; and
the supply of digital content which is not supplied on a tangible medium (e.g. on a CD or DVD) if you accepted when you placed your order that we could start to deliver it, and that you could not cancel it once delivery had started.

Model withdrawal form

(complete and return this form only if you wish to withdraw from the contract)

To: (BargainBookStores, 3423 Lousma Dr SE, Grand Rapids, Michigan, U.S.A., 49548, +1 616-301-2349)

I/We (*) hereby give notice that I/We (*) withdraw from my/our (*) contract of sale of the following goods (*)/for the provision of the following goods (*)/for the provision of the following service (*),

Ordered on (*)/received on (*)

Name of consumer(s)

Address of consumer(s)

Signature of consumer(s) (only if this form is notified on paper)

Date

* Delete as appropriate.

Shipping Terms

We will ship to all domestic and most international destinations.

Please note: Shipping times are estimated and are not guaranteed by BargainBookStores.

Shipping rates within U.S.A.

Shipping rates within U.S.A.
Order quantity	4 to 10 business days	4 to 9 business days
First item	� 0.00	� 29.64

Delivery times are set by sellers and vary by carrier and location. Orders passing through Customs may face delays and buyers are responsible for any associated duties or fees. Sellers may contact you regarding additional charges to cover any increased costs to ship your items.