Buy back of shares
This query is : Resolved
24 November 2013
please tell me that why companies prefer buy back instead of issuing dividend.
24 November 2013
the preference of buyback over dividend was the tax as the tax benefit.
However now this gap has been reduced as the buyback is now required payment of taxes @ 23% by the company.
However now this gap has been reduced as the buyback is now required payment of taxes @ 23% by the company.
25 November 2013
Additionally also the earning per share is diluted.
26 November 2013
Dear Tushar,
how is EPS diluted by dividend or buyback for that matter?
how is EPS diluted by dividend or buyback for that matter?
26 November 2013
when the shares are bought back the denominator reduces when we calculate the eps- diluted and hence the eps is increased.
26 November 2013
Tushar,
that is not referred to as dilution. Dilution of EPS means decrease. The buyback rather would lead to concentration of EPS!!
that is not referred to as dilution. Dilution of EPS means decrease. The buyback rather would lead to concentration of EPS!!
26 November 2013
then what is dilition of eps pls explain????????
27 November 2013
Diluted EPS refers to adjusting of EPS to convertible instruments such as warrant, convertible debt etc. so where any instrument is issued which can be converted to equity, they will have a potential dilutive effect on EPS.
So Buyback would lead to concentration of EPS. however fresh issue or bonus shares will have dilute impact as they lead to larger denominator. I believe you should covered it in AS - 20.
So Buyback would lead to concentration of EPS. however fresh issue or bonus shares will have dilute impact as they lead to larger denominator. I believe you should covered it in AS - 20.
27 November 2013
brother i understand about diluted eps but my doubt about buy back remain unclear . please eleborate it
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