What does Share Repurchase refer to?

Share repurchase refers to the process by which a company uses its cash reserves to buy back its own shares from the open market. This action reduces the number of outstanding shares, which can increase the value of remaining shares, improve financial ratios (like earnings per share), and signal to the market that the company believes its own stock is undervalued.

When a company buys back its shares, it essentially returns value to shareholders by increasing their ownership stake in the company and often creating a positive signal about the company's financial health. It’s a strategic decision often employed by companies with excess cash, providing them with flexibility in managing their capital structure and returning profits to shareholders.

The other options do not accurately capture the essence of what a share repurchase entails. Buying stocks to resell later describes a trading strategy rather than a corporate action. Investing in other companies’ stocks refers to acquiring external equity interests, which is distinctly different from buying back one's own stock. Issuing new stocks to increase market value implies raising capital and increasing the number of shares outstanding, which contradicts the fundamental goal of a share repurchase.