When a company buyback its shares. All shares bought back will affect firstly the share premium account and retained income (B/S Account). These shares will then be recorded as unissued or cancelled in term of the article of association of the company. So technically there is less number of share floating around , based on demand and supply theory a higher price will be taken by the seller if there is less shares in the market. Similarly when a comapny issue more shares, the company retained income will increase, share premium account will increase and because there is so much shares in the market , the price will generally drop cos if one buyer do not want to sell , you can alway buy it from another buyer at a lesser price. Hope this help Preston
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