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Once an NCIB is approved, the company can proceed with repurchases as it sees fit during the period that has been established. The company might or might not repurchase the full number of shares it is permitted to buy. An NCIB is launched when a company's executives believe its stock is undervalued in the market. As with any stock repurchase program, a company undertakes an NCIB because its executives believe that the company's publicly traded stock shares are undervalued. By taking back shares, they are reducing the numbers available on the market. Their own buying activity reduces supply and raises demand, leading the price higher. Once the value of shares rises to the desired level, the company might sell off part of its stake in order to raise cash, increase liquidity, and widen its base of investors. Through a normal-course issuer bid, a company can take advantage of what it sees as a discount on the stock’s current price.
Once an NCIB is approved, the company can proceed with repurchases as it sees fit during the period that has been established. The company might or might not repurchase the full number of shares it is permitted to buy.
An NCIB is launched when a company's executives believe its stock is undervalued in the market.
As with any stock repurchase program, a company undertakes an NCIB because its executives believe that the company's publicly traded stock shares are undervalued. By taking back shares, they are reducing the numbers available on the market. Their own buying activity reduces supply and raises demand, leading the price higher.
Once the value of shares rises to the desired level, the company might sell off part of its stake in order to raise cash, increase liquidity, and widen its base of investors.
Through a normal-course issuer bid, a company can take advantage of what it sees as a discount on the stock’s current price.
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