Hi Wee Leng,
When a company initiates a share buyback, the shares would be held as treasury shares. If treasury shares are written off, the number of outstanding shares would be reduced. If it is held in the company, these shares are redundant; no dividends and no voting rights. As a result, conservatively, I would not consider these shares (in existence) in my calculation of EPS, dividends, valuation, etc.
Hope that clears your doubt :)
Please login or Register to submit your answer