# Prof. Aswath Damodaran on stock buybacks

1 Faculty News September 13, 2014 ![The Economist logo](/sites/default/files/styles/246w/public/assets/images/uat_025662.jpg?itok=1_MW1PTy)>

Excerpt from [The Economist](http://www.economist.com/news/business/21616968-companies-have-been-gobbling-up-their-own-shares-exceptional-rate-there-are-good-reasons) -- "Even if the most extravagant boast about buy-backs—that firms can use them to create value through market timing—is flaky, they can still be a flexible cash-management tool. [Aswath Damodaran](http://www.stern.nyu.edu/faculty/bio/aswath-damodaran) of the Stern School of Business at New York University explains that they let firms vary their cash returns to shareholders as their profits oscillate. He sees dividends as a throwback to the 19th century, when investors insisted on bond-like payments."

[Read more](http://www.economist.com/news/business/21616968-companies-have-been-gobbling-up-their-own-shares-exceptional-rate-there-are-good-reasons)