Impact of Share Repurchases on Common Shares Metrics

Investors typically analyze various metrics to assess the performance of companies that issue common shares. One such metric is the earnings per share (EPS), which is calculated by dividing the company's net income by the number of outstanding common shares. However, when considering the valuation of common shares, it's vital to look beyond EPS. Price-to-earnings ratio (P/E ratio), for example, helps investors gauge how much they are willing to pay for a company's earnings. Additionally, the dividends distributed to shareholders can reflect the company's profitability and management's commitment to returning value to shareholders. Each of these factors plays a critical role in making informed investment decisions.

Given this context, consider the impact of a situation where a company significantly increases its share repurchases while maintaining a stable level of net income. What effect is likely to occur on the long-term metrics related to its common shares?