What is the primary objective of a share buyback program for a company?

To increase the supply of the company's stock in the market.

To reduce the value of the company's stock.

To lower the earnings per share (EPS).

To increase the value of the company's stock and improve financial metrics.

How does a share buyback affect earnings per share (EPS)?

It reduces EPS due to a decrease in cash assets.

It increases EPS by distributing the same dividend amount among fewer shares.

It increases EPS by distributing higher dividends to shareholders.

Why is a share buyback considered a tax-efficient way of distributing earnings?

Shareholders pay lower taxes on dividends from a buyback.

Companies pay lower taxes on dividends from a buyback.

Buybacks are not subject to taxation.

Both companies and shareholders avoid taxes on buybacks.

How does a share buyback impact the company's Return on Equity (RoE)?

It decreases RoE due to reduced cash assets.

It increases RoE by raising the value of the company's stock.

It increases RoE by distributing higher dividends to shareholders.

Which of the following is NOT a benefit of a share buyback for a company?

Increased earnings per share (EPS).

Improved Return on Equity (RoE).

Decreased residual value for remaining shareholders.

Enhanced value for remaining shareholders.

Which financial objective is NOT typically associated with a share buyback?

Enhancing earnings per share (EPS).

Boosting return on equity (RoE).

Increasing the value of the company's stock.

What is the difference between a tender offer and an open market buyback?

Tender offers involve buying shares at any price in the market, while open market buybacks have a fixed price.

Tender offers involve buying shares from existing shareholders, while open market buybacks involve issuing new shares to the public.

Tender offers are more tax-efficient than open market buybacks.

Open market buybacks involve buying shares from existing shareholders, while tender offers involve issuing new shares to the public.

Why did many public sector units (PSUs) opt for share buybacks?

To increase the supply of shares in the market.

To improve shareholder returns by leveraging cash.

To reduce the value of the company's stock.

To decrease return on equity (RoE).

Which scenario may lead a company to consider a share buyback?

High demand for new shares in the market.

A need to raise capital for expansion.

A desire to decrease earnings per share (EPS).

An undervalued stock price and excess cash reserves.

What is the impact of a company's failure to receive the minimum subscription for its shares within the specified time?

The company has to repay the amount received from applicants for shares.

The company can continue with the issue without any changes.

The company can apply for an extension from the regulatory authority.

The company can forfeit the shares of applicants who did not contribute to the minimum subscription.

Share Capital- 3 Free MCQ Practice Test with Solutions

	Company Law 81 docs\|44 tests

	Company Law 81 docs\|44 tests

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