The Fed will gather data from big banks and determine if they have enough capital to pay out dividends to goose their stocks higher, or enough capital to repurchase stock so higher earnings-per-share metrics makes them attractive.
Proceeds will be used to meet working-capital requirements, to repurchase common stock, to refinance debt, or for general corporate purposes, filings show.
For instance, Intel just recently issued non-convertible debt for the first time in nearly 25 years in order to repurchase stock and take advantage of the opportunity to capture value for shareholders.
When a company like Merck announces intent to repurchase that much stock it usually means that the directors think that it is undervalued on a long-term basis.