Final answer:
A stock repurchase reduces the number of outstanding shares, thereby increasing the ownership stake of the remaining shareholders and potentially increasing the value of the remaining shares if demand remains constant or rises.
Step-by-step explanation:
From a tax-paying shareholder's perspective, a stock repurchase has the effect of reducing the number of outstanding shares, which increases the ownership percentage of the remaining shareholders. This is because when a company buys back its own stock, those shares are either retired or held in the company's treasury and are therefore no longer part of the total shares available to all investors. A stock repurchase does not increase the number of outstanding shares, nor does it reduce the value of the remaining shares directly; indeed, the reduction in the supply of outstanding shares could potentially increase the value of the remaining shares if demand remains stable or increases.