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Buybacks boost value of options

August 05, 2007

"Stock buybacks earn oil firms a gusher of criticism" (Aug. 1) describes how companies inflate their stock value by repurchasing their shares but does not mention a related effect: The higher share price increases the value of the stock options. When the options are exercised, the shareholders' equity is diluted by the exact amount of the executives' gain.

Bert Scott

Villa Park

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