CA Final Download the best Free CA FINAL android app for cracking your exam! Download Now

Advantages of Buy Back

Advantages of Buy Back

profit risk loss

Advantages of Buy Back:

  1. It is an alternative mode of reduction in capital without requiring approval of the Court/CLB(NCLT),
  2. Its useful to improve the earnings per share;
  3. It helps to improve return on capital, return on net worth and to enhance the long-term shareholders value;
  4. It helps to provide an additional exit route to shareholders when shares are undervalued or thinly traded;
  5. Its useful to enhance consolidation of stake in the company;
  6. Its also useful to prevent unwelcome takeover bids;
  7. It helps to return surplus cash to shareholders;
  8. Buy Back supports to achieve optimum capital structure;
  9. It helps to support share price during periods of sluggish market condition;
  10. It helps to serve the equity more efficiently.

EPS gets improved as can be been with the below mentioned eg.

ParticularsPre Buy – BackPost Buy – Back
Profit100100
Number of Shares105
EPS1020

Advantages of Buy Back

cakart

cakart

At CAKART www.cakart.in you will get everything that you need to be successful in your CA CS CMA exam – India’s best faculty video classes (online or in pen drive) most popular books of best authors (ebooks hard copies) best scanners and all exam related information and notifications.Visit www.cakart.in and chat with our counsellors any time. We are happy to help you make successful in your exams.

Leave a comment

Your email address will not be published. Required fields are marked *