What is a likely consequence of a company's share buyback program?

The conclusion that a share buyback program likely leads to increased stock prices due to reduced supply is grounded in basic economic principles of supply and demand. When a company repurchases its own shares, it removes those shares from the market, effectively reducing the overall supply of shares available for investors. With fewer shares in circulation, the remaining shares can become more valuable, particularly if the company continues to perform well.

Additionally, share buybacks often signal to the market that the company has confidence in its future earnings. This positive sentiment can further contribute to rising stock prices as investors may see a buyback as a commitment to increasing shareholder value.

Overall, the combination of reduced supply and increased investor confidence in the company through buybacks generally leads to a higher stock price, making this option the most likely consequence of a company's share buyback program.