How to Calculate IRR on Stock Buyback
All, I urgently need help on this issue. How can i calculate the IRR on a stock buyback for a company that issues dividends?
Thanks
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Happy to help; think conceptually about what's being asked. Find the IRR, so you have probably one large outflow of cash at the beginning and cash inflows over time as a result. Obviously the outflow is the amount used for the buyback but what are the inflows?
That said, this analysis misses the mark because the real impact of a buyback is on EPS/CFPS accretion, CFPS doubly so since the denominator gets smaller and the numerator bigger.
Can you elaborate further on this? What is CFPS?
CFPS = cash flow per share would be my guess
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