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How does a share buyback impact the company's Return on Equity (RoE)?
  • a)
    It decreases RoE due to reduced cash assets.
  • b)
    It has no impact on RoE.
  • c)
    It increases RoE by raising the value of the company's stock.
  • d)
    It increases RoE by distributing higher dividends to shareholders.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
How does a share buyback impact the company's Return on Equity (RoE)?a...
A share buyback increases Return on Equity (RoE) because it reduces the number of outstanding shares, which in turn boosts the equity base. As a result, the company's earnings are distributed among a smaller number of shares, leading to a higher RoE.
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How does a share buyback impact the company's Return on Equity (RoE)?a)It decreases RoE due to reduced cash assets.b)It has no impact on RoE.c)It increases RoE by raising the value of the company's stock.d)It increases RoE by distributing higher dividends to shareholders.Correct answer is option 'C'. Can you explain this answer?
Question Description
How does a share buyback impact the company's Return on Equity (RoE)?a)It decreases RoE due to reduced cash assets.b)It has no impact on RoE.c)It increases RoE by raising the value of the company's stock.d)It increases RoE by distributing higher dividends to shareholders.Correct answer is option 'C'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about How does a share buyback impact the company's Return on Equity (RoE)?a)It decreases RoE due to reduced cash assets.b)It has no impact on RoE.c)It increases RoE by raising the value of the company's stock.d)It increases RoE by distributing higher dividends to shareholders.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for How does a share buyback impact the company's Return on Equity (RoE)?a)It decreases RoE due to reduced cash assets.b)It has no impact on RoE.c)It increases RoE by raising the value of the company's stock.d)It increases RoE by distributing higher dividends to shareholders.Correct answer is option 'C'. Can you explain this answer?.
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