A corporation buys back its stock on the open market to:
I. increase earnings per share
II reduce interest rates
III. use it for stock options
IV. use it for future acquisitions

These three are reasons why a corporation buys back its stock. A corporation with cash that it is not using may purchase its shares to reduce the number of outstanding shares. If operating earnings remain the same, having fewer shares of outstanding stock results in an increase in the earnings per share. The repurchase stock may be used for employee stock options or for acquisitions.