Am I on the right track??? CFAI glossary states: Repurchase yield The negative of the expected percent change in number of shares outstanding in the Grinold–Kroner model. So if a firm sells shares in a secondary, say an additional 5% of shares outstanding, total shares outsatanding will go up. As this is positive number, the repurchase yield is -1*.05= -.05 Thus with more shares outstanding, my expected return will be lower due to dilution. any thoughts??
Exact… If Delta Shares Outstanding is negative… (Shares Buyback)… The return will be positive…
catman Wrote: ------------------------------------------------------- > Am I on the right track??? > > CFAI glossary states: > > Repurchase yield > The negative of the expected percent change in > number of shares outstanding in the Grinold–Kroner > model. > > So if a firm sells shares in a secondary, say an > additional 5% of shares outstanding, total shares > outsatanding will go up. > As this is positive number, the repurchase yield > is -1*.05= -.05 > > Thus with more shares outstanding, my expected > return will be lower due to dilution. > > any thoughts?? Yup, you got it.
Thanks brother