A share buyback (or share repurchase) happens when a company uses its own cash to buy back its own shares. Buying back shares increases earnings per share (EPS). This means share prices theoretically should increase and benefit shareholders. But the question is… does it truly benefit shareholders? Warren Buffet preaches share buybacks as a tax efficient way of returning capital back to shareholders, therefore his favourite companies often buy back shares in large amounts. However, one must note that his investments are predominantly in the U.S. In the U.S, dividends are taxable, hence companies issuing dividends are double taxed, once at the corporate level and once more as dividends to shareholders. It is tax efficient to buy back shares for U.S-based companies because share buy-backs are not taxable and share prices should rise if EPS increases, returning capital back to shareholders. Share buybacks are also a vote ......