The second alternative way of making a distribution to shareholders is through a share buyback. A share buyback (also known as a share repurchase programme) involves a company repurchasing its own shares from investors at a pre-determined price, often close to the prevailing share price at the time. This allows a business to reduce the number of shares in issue – raising the value of each share left in the business – rather than just pay investors via a dividend.   Companies rarely have share buyback policies and often conduct them alongside ordinary or special dividends – although, if a business has a large amount of cash it wants to return under a one-off payment then they will usually only choose to make a special payout or repurchase its own shares, not both. Still, share buyback programmes can run for years and without a set deadline. For example, a company may pledge to return $5 billion within three years but it will usually retain flexibility by choosing as and when to buy back the shares depending on market conditions. The price paid to shareholders under the buyback will often move in line with the live share price. Companies often opt for share buybacks if it believes it is undervalued as it allows them to repurchase stock at a cheaper rate and to provide support to shares.