Buy Back of Shares
This query is : Resolved
05 June 2008
According to Sec 77 A , of Indian Companies Act , the shares that are bought back are extincted (destroyed), then what is the objective of a Buy Back ?
05 June 2008
Shares may be bought back by the company on account of one or more of the following reasons/ objectives
i. To increase promoters holding
ii. Increase earning per share
iii. Rationalise the capital structure by writing off capital not represented by available assets.
iv. Support share value
v. To thwart takeover bid
vi. To pay surplus cash not required by business
Infact the best strategy to maintain the share price in a bear run is to buy back the shares from the open market at a premium over the prevailing market price.
i. To increase promoters holding
ii. Increase earning per share
iii. Rationalise the capital structure by writing off capital not represented by available assets.
iv. Support share value
v. To thwart takeover bid
vi. To pay surplus cash not required by business
Infact the best strategy to maintain the share price in a bear run is to buy back the shares from the open market at a premium over the prevailing market price.
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