A share buyback (repurchase) typically:

A Dilutes EPS

B Increases EPS by reducing shares outstanding

C Has no effect on EPS

D Increases shares outstanding

✓ Correct Answer: Option B

Share repurchases reduce shares outstanding, increasing EPS if net income stays constant.

💡 Why is B) the correct answer?

The correct answer to the question "A share buyback (repurchase) typically:" is Option B: Increases EPS by reducing shares outstanding.

The other options — A) Dilutes EPS, C) Has no effect on EPS, D) Increases shares outstanding — are incorrect for this CFA Exam Prep question. As explained above: Share repurchases reduce shares outstanding, increasing EPS if net income stays constant.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Corporate Finance topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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A share buyback (repurchase) typically:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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