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FAQs on PPT: Buy Back of Securities - Advanced Accounting for CA Intermediate

1. What is a buyback of securities?
Ans. A buyback of securities refers to a company repurchasing its own shares from the shareholders. This can be done through a tender offer, open market purchase, or a direct negotiation with shareholders.
2. What are the reasons for a company to conduct a buyback of securities?
Ans. Companies may choose to conduct a buyback of securities to return excess cash to shareholders, boost the stock price, prevent hostile takeovers, or improve financial ratios such as earnings per share.
3. How is a buyback of securities funded by a company?
Ans. A company can fund a buyback of securities using its cash reserves, profits, or by taking on debt. The decision on how to fund the buyback is typically made by the company's board of directors.
4. What are the regulatory requirements for a buyback of securities in India?
Ans. In India, a company must comply with the regulations set by the Securities and Exchange Board of India (SEBI) while conducting a buyback of securities. These regulations include obtaining approval from shareholders and following the guidelines on the maximum buyback size.
5. How does a buyback of securities impact a company's financial statements?
Ans. A buyback of securities can impact a company's financial statements by reducing the number of outstanding shares, increasing earnings per share, and potentially boosting the stock price. It may also lead to a change in the company's capital structure and financial ratios.
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